York Urbanist

THE OPERATION – Part 2

This is the eighth segment in a series of creating a hypothetical and entrepreneurial approach to rebuilding the sport of curling in the fictional community of Aasvogel, Ontario. It follows from:

http://yorkurbanist.com/recreation/curling/curling-a-recreation-to-a-business/the-operation-part-1/

Some of the financial figures exceed the margins on the following paragraphs.

 

 

 

The Group of 18 reviewed their Options:

4 sheet floor planMunicipal 4-sheet, recreation based, primarily league based – This will require the group to solicit the municipality to assist in the funding of the capital construction and contribute to the operations.

Benefits: strong financial backer; tie into municipal marketing; combine facilities with other municipal recreation; risk assumed by the municipal sector.

Disadvantages: requires municipal public consultation; control of most operational aspects ceded to municipality; possible labour issues; volunteers more involved

 

 

 

Assumptions

2014

2015

2016

2017

2018

2019

2020

2021

2022

Adult membership

250

275

300

325

350

375

400

400

400

Seniors membership

25

30

35

40

50

50

50

50

50

Student membership

40

40

40

40

40

40

40

40

40

Junior membership

50

50

50

50

50

50

50

50

50

Total membership

365

395

425

455

490

515

540

540

540

Revenues
Total Revenues

$389,125

$423,775

$464,730

$497,477

$520,961

$536,647

$553,268

$560,658

$568,196

Expenses
Total Expenses

$457,500

$455,550

$453,691

$451,925

$450,253

$463,678

$462,502

$461,432

$460,471

Net Income (Loss)

($68,375)

($31,775)

$11,039

$45,552

$70,708

$72,969

$90,766

$99,226

$107,726

Notes:

Assumed Ice Rental Rates

Membership Rates

2014 Averaged

2014

 $                       75.00 Adult  $    700.00

2015

 $                       80.00 Seniors  $    400.00
 $                       90.00 Student  $    250.00
 $                       95.00 Junior  $    100.00
Thereafter, rates are assumed to increase at 2% per annum.

 

 

 

IMG_6572Golf Course 6-sheet with a mix of competition/recreation – This involves the banding together of two groups of recreation oriented entrepreneurs.  The golf course has the land capacity and the construction of a facility for another sport will have cross-marketing benefits, a chance to ensure a sustainable golf course membership. 

Benefits: cross-marketing potential; sharing of risk in the private sector; sharing human resources; inexpensive land, repurposing vacant land; operations control by the originating group; flexibility of operations and marketing to recreation and competitive sportsmen; scheduling of construction facilitated.

Disadvantages: some control by the golf course operator; land is subject to the success of the golf facility

 

 

Assumptions

2014

2015

2016

2017

2018

2019

2020

2021

2022

Adult membership

350

400

450

500

550

600

600

600

600

Seniors membership

50

75

100

125

150

160

160

160

160

Student membership

40

40

40

40

40

40

40

40

40

Junior membership

50

75

100

100

100

100

100

100

100

Total membership

490

590

690

765

840

900

900

900

900

Revenues
Total Revenues

$647,200

$731,770

$823,174

$904,041

$960,510

$1,002,992

$1,015,372

$1,028,000

$1,040,880

Expenses
Total Expenses

$675,650

$679,363

$683,280

$687,406

$691,744

$696,299

$701,075

$706,076

$711,308

Net Income (Loss)

($28,450)

$52,407

$139,894

$216,636

$268,766

$306,694

$314,297

$321,923

$329,572

Notes:

Assumed Ice Rental Rates

Membership Rates

2014 Averaged

Sources of Revenue

2014

 $                       80.00 Adult  $    600.00 Summer events on rink concrete

2015

 $                       65.00 Seniors  $    400.00 Summer events in Lounge

2016

 $                       90.00 Student  $    250.00 Fitness classes

2017

 $                       95.00 Junior  $    100.00
Thereafter, rates are assumed to increase at 2% per annum.

 

 

 

imagesCA3EC3LSIndependently operated 8 sheet facility with a broad spectrum of other facilities included – The group will have the freedom to create an operation that suits their pocketbooks.

Benefits: full operational flexibility; highest potential revenue; revenues from a variety of sources

Disadvantages: highest risk of the options; costs include acquisition of land; highest cost

 

 

Assumptions

2014

2015

2016

2017

2018

2019

2020

2021

2022

Adult membership

400

450

500

550

600

650

700

750

800

Seniors membership

50

75

100

125

150

160

160

160

160

Student membership

40

40

40

40

40

40

40

40

40

Junior membership

50

75

100

100

100

100

100

100

100

Total membership

540

640

740

815

890

950

1000

1050

1100

Revenues
Total Revenues

$1,070,290

$1,184,403

$1,285,159

$1,360,979

$1,440,704

$1,505,930

#########

$1,650,657

$1,713,614

Expenses
Total Expenses

$884,000

$883,730

$883,650

$883,763

$884,073

$884,584

$885,301

$886,227

$887,367

Net Income (Loss)

$186,290

$300,673

$401,509

$477,217

$556,631

$621,346

$703,899

$764,430

$826,247

Notes:

Assumed Ice Rental Rates

Membership Rates

2014 Averaged

Sources of Revenue

2014

 $                       80.00 Adult  $    750.00 Summer events on rink concrete

2015

 $                       85.00 Seniors  $    500.00 Fitness classes

2016

 $                       90.00 Student  $    300.00 Meeting room rentals

2017

 $                       95.00 Junior  $    100.00
Thereafter, rates are assumed to increase at 2% per annum.

 

The group found that the summary sheet of revenues and expenses assisted them with their decisions.

The four-sheet municipal option was the least risky, but control was out of their hands. Did they just want to curl and have someone take care of the management?

The six-sheet golf course option had the appeal of association. After all some on the group were already golf members and others liked the opportunity to associate with a summer facility.  The concept option made money, which would have to be shared with other shareholders.  There are options to how the financing would work. 

The eight-sheet private option would require them to set up an independent corporation.  The larger facility appealed to the diehard curlers, because they could entertain larger events and planned growth would gain them profits.  They would need to return to their Vision Statement:

The Aasvogel Curling Centre will be a sustainable, privately operated, visible, year-round sport and recreation centre, which will focus on education and excellence in curling, while reaching out to complementary recreation activities in our diverse community.

After some consideration, the more conservative option to associate with the golf course was selected.  Members saw opportunities for private shareholders and growth in the future if success is secured. Risk would be shared amongst a group of businesses and individuals. A corporation was needed, but many know the owner of the golf course, had spoken to him in advance and determined that the concept was sustainable. There would be shares sold in the corporation to raise capital.  This was different than most Canadian curling facilities operated, but if the corporation could be profitable, there were opportunities.

Next up: Delivering the services.