More Business Models for Skateparks

Some skateparks try to work like Golds Gym but they often don't go all the way.  Patrons pay a monthly fee, a membership, and skate when they want.  Unfortunately this model is not very successful for skateparks because of the high cost often asked for up front.  With a 12$ session fee versus a $50 monthly fee (I've seen more), kids, teens, adults and their parents are wary about how much they will use this service.  Unlike Golds Gym where anyone with a pulse can sign up, skateparks are in a smaller market to attract people to their service.  Because Golds Gym can get so many people in, and the industry has accepted their 25$ or so cost, they are able to make money with lower monthly premiums.  But in many ways, skateparks can operate like this too, it just takes someone to start.  First a park would have to eliminate sessions, and thus also eliminate $12 fees.  The only way you can get in the gym is pay the monthly fee, with a credit card.  If the market can support this idea, then the skatepark can run like a gym.  But since no parks are doing this now, an owner would take some risk to pull it off. Why?  Basically gym style pricing schemes would offer the skatepark more financial security because it collects money on a monthly recurring basis.  These memberships are tied to credit cards that are automatically charged each month.  So say that 500 members all pay $50 a month to skate for as much as they want, the skatepark is looking at a $25,000 revenue stream per month.  This revenue can be taxed differently too as it is not "entrance" fees which often are taxed like concert tickets.  Within this scenerio, planning becomes easier because revenues are relatively constant.  Added emphasis and efforts are given to keeping the membership going and happy.  I am sure a few parks out there would like to know that this sort of money was coming in monthly.  Even without food or other sales, revenue of $300k per year would be welcome in many parks.  So Golds Gym is not the worst way of looking at your business structure, but you should see what your market can take before you change your current park's finances.

Business models for a skatepark

When considering how to make a business like a skatepark, one must look at other models to see how they run their business, and what a skatepark can use as their model.  The basic model used by many skateparks looks a lot like a roller rink, movie house, or amusement park.  In this model, patrons pay entrance and enjoy their time.  From many of these skatepark operations we see a reliance on entrances as the means of supporting the park.  Due to the fickle nature of skateboarders and often reliant on weather to drive people indoors, this model may not be the best one for every environment.  Unlike movies that change their show every week, skateparks are very static in their offerings.  Often change requires money and time, which is hard to come by sometimes especially if entrances are and have been down.   Similar to this model is the amusement park.  The largest parks rely on people traveling large distances to participate.   6 flags has an enormous budget and spends extensive money on innovation and novelty.  This model requires a lot of funds, advertising, and less change, but is similar in operations as a skatepark.  Both of these businesses have high prices, often have one to two visits per person per year, caters to older children and adults, and uses a captive audience and high food mark ups to make most of their money.  They also have the advantage of not offering a specialized skill sport as their only draw, which makes them more capable of appealing to a larger audience.  The point of these two operations that I feel could be emulated (copied) would be the easy to prepare and relatively profitable food choices, and the layout of amusement parks as a way to offer different experiences in a park within the confines of your building's space.  Food, if possible, needs to be a part of a park that relies on entrances as a means of income.  Offering something for the fans, friends, and parents of the patrons allows you to maximize the market and profit from visitors to your park.  Everyone gets hungry and thirsty but not everyone can ride your ramps.  Providing and monopolizing on every visitor can make your business profitable.  Similarly you can offer a different experience in your park's confines by laying out your park into different skate areas.  You could have a street course, a tricks area, and some miniramps, all typical parts of a skatepark.  But if they are crammed one on top of another, then the idea of "park" is gone.  What if you had areas that were designed for these types of skaters separated with walkways, seating areas, concession carts and the like, to provide "park" to your skatepark.  While some could argue that these areas don't maximize the skating which is what these parks are selling, I would counter that you are actually offering more than just some ramps pushed up against the wall.  You are offering a skate scene, and this is crafted and manipulated by you.  While a movie house is offering the latest flicks, it is also offering a movie experience that differs from your home.  Similarly, an amusement park understands that quality attractions do bring the customers in, and getting them to stay, relax, and have fun requires spaces  where they can relax, meet up, and eat food.  Looking to these aspects of other similar businesses can help you create a skatepark that is interesting, unique, and profitable.  I will blog soon with other examples of business models that could work for different types of skateparks.

Time to plan your year

As we wind our way through January, it is time to get our plan going for the rest of the year.  Too often we are surprised by how quick the time passes and we haven't advertised our camps, haven't planned out our new ramp build, haven't worked on getting the pro tours or events at our parks and then it is too late.  This why it is important for skatepark owners to get a big calender out and start blocking time for events, camps, and construction.  These are all things that need doing now, in January as you look to how you will make the most of this year.  If you can plan your camp now, what it does is edge out the other camps that parents sign their kids up for. You are competing now with a summer that fills quickly for young skateboarders.  By getting your flyers, mailers and ads out now, you can fill your camps quickly and ensure another packed summer.  Many parenting magazines have "camp" issues that come out soon, so having advertisements ready to place in these will also help you take advantage of good advertising.  Camp ads that reach your parent's market are usually well worth the money.  Getting an article together, with photos can also help get some extra free press that helps the magazine with content, and helps you with raising awareness.  We all know that you have ideas and plans for the year, and January is a great time to get them on paper, with time committed to making them happen.  I suggest that as you are looking for ways of filling your calendar with events, look to your staff for suggestions and ideas.  Give them specifics like we need a march weekend event or weekday event and set one or two to plan it and create it.  Offer them ownership of these events and you will soon find, these could be really great things for you and your park.  Don't forget to download the local school calendars too so that you can take advantage of days off with longer hours, or special sessions.

Skatepark Promotions, Holidays, Events

It's that time of year again.  Hopefully the busiest time you will have, with many parks unskatable, kids with free time, its's cold outside and warm inside.  How are you planning on taking advantage of these additional days events.  Here are a few ideas-

1. Promotions, particularly during the holidays don't have to be extreme.  You don't have to slash the price of money winners in order to move product.  Many times, adults are looking for things for their kids.  They don't have a clue about what to offer.  Putting together packages that are attractive, cost conscious and trendy could be a good way of going after this market. Make certain that these promotions are "promoted" by fliers, mailers, email, and website.  As I have said in past articles, put your promotion into a campaign.  Have a contest with your staff to see who can move the most stuff.
     Additionally you can lure in people with a money neutral item in order to sell other things.  Having a "sale" deck could be a way of getting people into the shop to look at your items.  many retailers have this item at a limited quantity say 5-10 items.
     Another promotion type is the "additional 10% for members" or whatever.  Instead of giving 35% off an item, offer 25% plus an additional 10% for members type sale.  While in people's heads they think they are getting 35% off they are really only getting 32.5% off.  So instead of discounting 35% or $35 on $100), you are offering $32.5 on $100.  I would advise too that you make certain your discounts are within your costs, and that you offer reasonable discounts.

2. Events - Having holiday events is tradition in many parks.  Putting on a good event takes time and planning.  Having a person that can MC is vital, as well as a DJ, prizes, and trophies.  Planning out your next year could put a culminating event around this time.  Look to monetize a day that is not your busiest, or try to avoid Saturdays.  Better to put these on a weekday evening, or during holiday break.  Advertise these events too so that kids will know to come watch.

3. Parties - Everyone wants to have a holiday party.  Why not market your park as a place for local shops, groups, and regular customers to have a private park party.  Having space available for them to have cake and other foods is always a good idea too.  Many of the kid oriented places like those inflatable bouncing businesses have several rooms and packages available for birthday parties.  Spending time to create fliers and a plan for these types of event is a very good idea.  Dedicate a staffer to deal with the party and make them feel like the cost is associated with service.  These events could also be scheduled after hours, making down time for the park, a profitable time.  Don't forget to offer a party for members and your staff.  Noting the wonderful dedication and hard work of your staff goes a long way to getting more out of them.

4. Holiday camps - Many parents are looking for things for their kids to do during the days.  Consider hosting a camp during the morning hours like you should be doing in the summer.

Good luck and Happy Holidays!

Promote Skatepark Memberships by adding value, events!

Often we look at membership as either an exclusive way of dealing with people, such as in gym memberships, or as a price break mechanism like in grocery stores.  In the gym membership model, people are necessarily excluded because of spacing issues and the rest are roped into constant fees.  In the more often thought of structure for memberships skateparks offer discounts for members.  Like loyalty cards at the grocery store, there is one cost for members, and another cost for others.  Many of these programs offer rewards, which I have not seen offered by skateparks.  Often the memberships allows the skatepark to send mail, email or other stuff to the members (don't forget the opt out option), and this is often in keeping with other loyalty programs.  But if this is the model, then rewarding people for loyalty should also be in the making.  Tracking visits, purchases, and the like should be a routine system designed into the memberships.  Adding these tracking systems is likely part of most membership software reports and can be monitored through non-digital means with a punch card.  This would be easy enough for visits and could be duplicated with skateshop purchases and justified at the end of the month by an employee relatively quickly.  These incentives give the member a feeling of worth, identity, and "loyalty".  Future purchases might not be made at the park because of personal circumstances, but when someone gets close to a "goal", this could be a decisive issue in a purchase decision.  Similarly, a program like this allows the owner to keep memberships real, constant, and worthwhile.  This topic reflects a desire to make the most of "member services" so that the additional costs of a membership provides real value beyond just cheaper entrance rates.  Having so many benefits that you would need a brochure to list them makes a membership more valuable.

Adding events that are geared toward members really adds value to these memberships as well.  These events can be as simple as member discount day, to more elaborate as member only contests or parties.  While many of us would ask why a business would want to offer such a money losing event such as a free party at the park, I would suggest that there are more than one way to pay for these events such as exclusive product sponsorships, or the like.  None the less, think of a member party as a way of invigorating your membership, promoting membership sales, and creating a good feeling about your park.  A similar way to get members to feel like they matter to your business would be to invite them to an all member meeting.  This meeting could be a way for members to add their ideas on the business, or a way for you to see if a new pricing for memberships could work.  Those of you who read the last posting on memberships would know that if you are in business already, changing park policy could be tricky.  Calling a meeting and seeing what the members could do, or would pay for such a privilege would help in selling the idea, getting feedback, and/or testing the waters.  Don't forget that the way to most people's hearts is through their stomachs, so feed them.

Obviously there are many things that can be done with memberships that can help create good feelings with your members and their parks.  Think of ways to make your memberships special.  And as I have said always, if you have memberships, get your staff on board to selling them every visit and checking them every visit.  Show that theses are important.  Good Luck!

As a note, the spa-usa.org offers an insurance program for skateparks that involves personally insuring individual skaters.  Memberships can offer this as part of their pricing.  More on this at a later date.

What can skatepark membership privileges look like?

When most skateparks open they ask their patrons to chose between being a member or non-member.  Why?  One idea would be to have no memberships.  What do you really need a membership for?  The skater doesn't need it if he/she can pay a few dollars more and still enter.  So why would a membership be attractive?  Often we see that memberships are like sales coupons: member price = less.  In grocery stores they have memberships and can track your buying and funnel products at you based on deals they get from suppliers.  At REI your membership means you get a yearly dividend as an "owner".  In skateparks often we see that members have a lower price on entrances and other services, much like a warehouse buying service.  You pay once a year and you can then pay less for things you want.  Sometimes this includes membership prices on goods and services like shirts and camps.  You don't have to buy a membership but if you are thrifty and come often enough you can save a lot of money.  Many people don't think along these lines of future savings.  They want the savings now.  If your membership is pricey, then you will have to really want to support your park, or your park must be extremely expensive.  So what can skateparks do to make memberships that are costly attractive to the potential patron?  What would be a reasonable goal for these memberships.  Lets look at scenarios to see costs, and returns.

Most would think a $25 membership is affordable.  So if you are going budget capable membership, what would you offer with this to make it worth your wile to offer it at this price?  If you said you get to skate this time and next time for free for example, and your sessions for members costs $12, you would be able to sell this as an affordable way for them to be here.  You could give them a get in free pass with the idea being they could use it on the next visit.  This would be a good selling point and could move quite a few of these per year.  If you have an i.d. the cost of this would have to be taken out as would taxes, so you would in all likelihood take in $22.50 of this.  If you sell 1000 over the course of the year this would generate $22,500.  If the membership was not offered and these 1000 people came in at $15 for 2 sessions you could generate about $30,000 less tax and no member card costs.  While we can you don't have to offer a free session, the bottom line is effected.  What does the membership add to your revenue flow at this cost.  The membership is a good tool for gaging the loyalty of your patrons.  You have a way of identifying with the park as you are a card carrying member.  You get special letters in the mail and maybe specials every month.  But are these enough to justify losing $7500 in revenue?  Maybe not at $25.  The problem of price point is very tricky.  Figuring out what you need to offer as an incentive is hard to figure and something that you can survey your current members and your current partons about.  This could help you get a handle on how much to charge for a membership.

I would suggest that memberships should be special and they should cost a substantial amount of money.  I suggest you price your membership at $150 or more but offer a lot for this.  What days can you give them for free?  How much can you offer them for use of the place?  How many member events can you generate?  This will depend on how your patrons see your place.  What if you were able to get 1000 people to buy in at this level?  Could you make your rent on $150,000 and have members enter free everyday?  Why would they see this as value if every time they come the place is filled with nonmembers and the place is crowded?  Could you make it free of others most of the time?  Obviously the busiest 2 days are Friday and Saturday, with Sunday the next busiest.  What if you had Sundays through Thursdays as member only and free?  Does this now make $150 (or more depending on your size) worth it?  Add in sales of stuff, 2 busy open days, special events, and you might have a good plan here.  The membership now has meaning, this is their park, they paid for it.  They have now the identity of a park member and you can really look to them for support, hype, and pride.  Obviously, looking at your pricing is a good idea, but one that needs a lot of thought.  I recommend you study this and see if it would work.  Once you set your price, set your goal and get all your staff on-board selling this.  Set sales goals, offer prizes, put out promos. Good luck.  Go skate.

Dealing with a Disaster At Your Skatepark

Sometimes things happen in the world that negatively affect your skatepark.  With the weather events of recent months, and all the fires and other things that are effecting different areas, I thought I would spend a little time going over what you should do to deal with a disaster.

1.  Have a plan ahead of time.  You need to know the numbers of your lawyer, insurance agent, and key staffers and investors.  Keep a sheet at home and in the office of these numbers so that you can act without being inside the building if needs be.  Having a calling tree so that you don't have to call everyone on your staff, you call one, and he/she calls the next etc.

2.  Let your public know what is happening.  Rumor control starts with you.  If you didn't suffer any damage, if your place was ruined, let the people know.  Sympathy can go a long way to getting help fixing, and to making a reopening an event.

3.  Assess the damage, assess how you can recover.  Sometimes things are ruined that you can't recover from financially as you were.  You have two options at this time, call it quits or try to reopen.  If money is the problem and insurance isn't covering it, you can raise money from your members, add investors, or look to the banks for a loan, have a disaster sale etc.  There are also community resources available for small businesses (these are very competitive but you should try for them).  But the main issue is what you need to do for your sanity.  Restarting can be hard and take a lot of energy so you need to either go all in, or not.

4.  If people were hurt you need to talk to your lawyer first.  You can express to the people who were hurt concern, send a get well card, give them a call on the phone and hope that they are all right.  Your lawyer will say "don't ever admit wrong doing".  This is possible while at the same time expressing a human hope that the persons hurt will recover.  You have to worry about lawsuits when people are hurt, often they will cast a wide net as a matter of practice to see if they can get money to help with their costs.  So speaking with your lawyer is a good idea anytime there are "issues" with the park.  You should have a working relationship with a lawyer anyway.  I know it sucks to go in to the office, speak with this person for 1/2 an hour and get charged like $200.  But protecting yourself and your business is important too, and these periodic meetings help ensure a good relationship and ensure that you are addressing your liability and risk issues.  If you are concerned about the costs of these visits, have an agenda when you go in, limit non productive time, and get out quick.

5. Clean up and get back to work!  With contests, events, and lessons, reschedule these events.  Spend some money advertising to get the word out to those people who might not know that you are open yet.  Plan a big re-opening event with music, contests, etc. to generate a buzz.  Update all your media, website, twitter, facebook, google+, or other forums that you publish.  Get the word to the parents that you are safe, clean, and ready to entertain!  Getting the word out will take a little more than just opening your door, especially if there was a lot of damage in the area.  Spend the time and money to let your constituents know your are doing business.  You might have to cut back on some hours of staff at first if business continues to be slow.  There is little predicting how the community will react to a disaster and you need to be flexible, proactive, and responsive.