There are always plenty of equipment options available that could improve your facility’s image and service range. Whether you’re considering state-of-the-art performance analysis machines or something as simple as real leather baseballs for your batting cage, you can use the following steps to analyze whether or not the purchase will be a good investment for your facility.
Step 1. Establish your financial goals and decide how you are going to determine your return on investment.
Let’s say that you have a batting cage facility with standard pitching machines, and you’re considering purchasing a new pitching machine that also incorporates swing analysis statistics for the user. Do you expect its new features to increase your batting cage rental revenue? If so, by how much? Based on those estimates, how long will it take before that increased revenue pays off the cost of the machine? If there are any additional costs for the equipment, such as installation fees or extra personnel costs required for operation, factor those costs into the ROI calculations. Breakeven and profit goals will depend on your personal situation, but you do have to establish them.
Step 2. Calculate how much business is needed to reach those goals.
If you think that the new pitching machine will increase annual revenue by 20%, break that down – how many more rentals is that per month? This will make your success a lot easier to visualize and track over time. Next, consider how do you expect to get those extra rentals. Will they come simply by word of mouth from clients who are already coming into the facility, will extra marketing effort be required? Calculate whether you have the ability to bring in those extra rentals based on your current client database and marketing list.
Step 3. Plan your marketing approach for the equipment.
I talk a lot on this blog about marketing, because the lack of marketing is a big contributing factor to sports facility failure. You should have a marketing plan for your regular camps, clinics and instructors, and your equipment is no different. A few ideas to market your equipment:
- Create Equipment-Specific Memberships. I always advocate memberships because they provide a stable source of income with recurring revenue for sports facilities. However, creating a new membership around a new piece of equipment is also a great promotion tool for the equipment itself, particularly if the equipment is new and upscale, such as the new pitching machine in our example. At DNA Sports Center, we bought a HomePlate pitching machine and created a membership specifically for use of that batting cage. Members get priority access and discounted use on the machine, as well as discounts on baseball merchandise and baseball lessons. We also offered a promotional price on the membership for the first month that it was offered, offering clients a 6-month membership at the 12-month rate. (Of course, eSoft Planner scheduling software was used to implement and automate all of these benefits).
- Create a Referral Program. Create incentives for clients who bring their friends in to use that new piece of equipment. I’d suggest making the incentive payable when the referral client actually pays for the first time. Incentives can range from a T-shirt or other apparel, a free rental, or a voucher for the concession stand.
If you would like more information on how the process of purchasing equipment for your facility, consult with Mike Meszaros at (513) 791-4940.