Startup Issues Archives - Building a pickleball business

Pickleball business startup: what a lender or investor needs to see

Unless your rich uncle is handing you a chunk of cash, you’ll need to find startup capital from lenders or investors. Whether you purchase a franchise, build a building, or lease a space you’ve got an “up front” capital need. To get it, you can borrow (debt) or offer shares in your business (equity). Either way, the folks providing the money will want certain information and assurances.

Business Overview: Details about the nature of the business, industry analysis, market research, competitive landscape and scale of the opportunity
Information about you. Your background, experience, the team you’ve assembled, your personal and business credit history and your suitability to launch a pickleball business.
How much money you need and when it will be paid back, backed up by financial projections.
Financial projections / Feasibility Assessment. Startup expenses, and detailed line by line operating revenues, operating expenses and net income. Monthly in year 1, annual summaries for years 2, 3 and perhaps further.
Operating plan. Description of key business processes such as marketing, customer service, new business acquisition, administration, and staffing.
Critical success factors. Key things that will need to happen for financial projections to be achieved. The “how” behind the numbers.
“Skin in the Game”: Lenders and investors want to know you are personally committed and not just risking their money. Your money or in some cases your collateral will need to be on the line for them to feel comfortable that you will work hard to get the results.

To initiate professional business planning for your pickleball club, or for other consulting, contact us so we can learn about your project and propose ways we can help. Pickleball Business Advisors is brothers Bill and John Pryor. We provide a variety of consulting services based on extensive experience in fitness business development, and research into the fast growing pickleball marketplace.

Investing in Pickleball

The pickleball phenomenon, primarily its insane growth, has sparked a flurry of investments in various niches.

Paddles, gear and accessories
Court construction services
Technology for operations
Communications and Media
Coaching and teaching
Professional leagues
Tournaments
Real estate
And our favorite: Pickleball Clubs….where the rubber meets the courts.

Our specialty is helping entrepreneurs launch dedicated pickleball clubs: typically indoor, membership driven, fitness businesses. There are literally hundreds opening in the near future, and in my opinion there will ultimately be thousands. We believe a well run club can compete and be nicely profitable if certain best practices are built into the original plan and nurtured.

Investing in a pickleball club. If you build it, will they come?

We hear primarily from 2 kinds of people. First people who live and breathe Pickleball and have personally witnessed the explosion in their communities. They understand the appeal because they’ve lived it. Secondly, we hear from business people / experienced entrepreneurs who recognize a rising tide and are looking for an angle to get involved. They don’t know pickleball, but they know it’s hot.

A Common mis-perception by both groups: Investing in a pickleball club is investing in a court-rental business. There is a temptation to do an overly simple calculation that goes something like this:

I have 8 courts open 14 hours a day, 3,360 hours a month
I will charge 50 dollars per hour
I will get 50% occupancy
Therefore I will gross over $1 million per year
Boom, I’m successful

If this is the essence of your model, and you build your staffing, marketing and operating strategy around it — we believe your business will struggle. Court rental will be a piece of the puzzle, but we believe it will need to be interwoven with a variety of other programming….and in fact will not even be the majority of revenue in many cases. An 8 court club can indeed reach $1 million per year and beyond, but not without a creative approach to programming, community building, offering cool experiences, and keeping players engaged.

Investing in a pickleball club means investing in your team and your strategy

Yes, you need to find a good facility, build nice courts and create an appealing space. But if you want to get off to a strong start, you’ll also need to invest in a team and an approach that builds a loyal repeat player-base. You need to convince players that have been playing for free, that they should pay. Just renting courts will not be enough to make the model work.

Pickleball Business Advisors is brothers Bill and John Pryor. We provide a variety of consulting services based on extensive experience in fitness business development, and research into the fast growing pickleball marketplace. To initiate a feasibility assessment for your pickleball club, or for other consulting, contact us so we can learn about your project.

Opening a pickleball club

Consider these recent stats about the pickleball market:

Participation increased 158.6% over three years.
Pickleball growth resulted in 8.9 million Pickleball players in the United States over the age of six, up from 4.8 million in 2022. More data.

If you are a pickleball player and someone in business, and if you have an entrepreneurial bone in your body I’m sure you’ve thought to yourself: “this is an insane-growth market and there has to be some great opportunities in it”. Yes there are. And like in any market, the people who get in reasonably early AND execute well, can build great businesses.

At the core of all this is of course people playing pickleball on an actual court. Right now, and for some time to come, there is a dire need for more courts. There’s a capacity issue, a simple matter of supply and demand.

If you’re sold on the market and believe as I do that this is not just a fad, then you’re considering investing in a pickleball club, or a pickleball facility. The business plan you create will need to consider a few unique dynamics of this market.

Business planning for a pickleball startup

What are the players in your market used to? Most are playing somewhere today, Is it indoors or outdoors? On what quality court? Is playing time good? Do they socialize, or just play? What can you do to make everything better? What can you create so that people who are often playing for free….will pay.
Do you have a detailed strategy to be sure the unique community vibe of pickleball is preserved and leveraged? This is a critical element in the rapid growth of the game.
A pickleball club is a capacity restricted business. Period. Optimizing revenue means filling courts. What is the strategy for optimizing court occupancy? (hint: think programming).
What are the critical success factors related to cost-structure, especially rent and staffing. What can the model afford? What is needed to run the business.
Membership and court rental are probably not enough. Building in ancillary revenue streams is something to plan from the outset.

Obviously any pickleball club business plan will project startup costs, operating revenue and expenses, and the financial viability. At the end of the day, driving revenue will come down to how well you execute on the things outlined above. These are the things that bring people in. Where the rubber meets the court.

Creating a pickleball club experience

The reason (many) pickleball players will pay to play at a cool pickleball club is because it offers more than what they get at the local public courts or the gym at the YMCA. Successful pickleball clubs don’t just provide courts for play, they provide an experience. Stated another way, this is not a simple court-rental business, this is an experience business. Different clubs are creating different types of experiences, the ones that do it best will build player loyalty and financial success as a result.

What kind of club do you want to build?

The type of club you want, your “vision” will directly impact key decisions made during the planning process. Decisions about space design, amenities, staffing and other expenses will flow from your vision, so it will be important to define things in advance —- knowing of course that things can evolve and change based on market conditions. Things to consider:

Food & Beverage. If this is a part of your business, how extensive will it be and what role will it play in your operation?
Amenities. Are you a cushy club, simple and basic, or something in between? This decision impacts a number of factors including pricing.
Community. By this I mean the community vibe within your club, but also how your business interacts with the nearby community.
Programming. If you’ve rooted around in this blog, you’ve seen a bunch on this critical topic. Good, creative programming guided by passionate, energetic staff is key thing missing from outdoor open-play, and a thing that will a) make players return and b) get them to pay.
Serving niches. Somewhere in your strategic thinking is the idea of addressing a variety of niches: men, women, all ages, athletes, non-athletes, etc.
Events. How important are (or should be) events to your business. For some club owners, this has emerged as a key revenue stream whether planned for or not. If events are important, how does this impact your plan, your marketing, your staffing?

Market differentiation matters

No matter where you are, you can be sure multiple pickleball clubs are in process if not already open. God Bless America and our capitalist, entrepreneurial spirit. “First-in” can certainly be helpful, but in our opinion, this whole area of “experience creation” is what will differentiate pickleball clubs and ultimately determine which clubs are the most successful.

Opening a pickleball club: 4 questions to answer honestly

If you are considering the launch of a pickleball club, I recommend asking yourself 4 important questions: 1) Are the conditions right in my area to make this a strong and profitable business? 2) Do you have a thorough understanding of what it will take to be successful? 3) Are you cut out to be an entrepreneur? 4) Will running this club be fun?

If the answer is no….to any of these questions, I would say don’t start a club. Let’s take them one at a time:

1) Are the conditions right in my area to make this a strong and profitable business?

For most people, in virtually all parts of the country, the answer to this is yes. Rarely is there such a pervasive phenomena with well documented demand and ongoing growth. In our opinion, unless your location is sandwiched between 2 successful competitors, you could make this work almost anywhere…IF you execute. Which brings us to question #2.

2) Do you have a thorough understanding of what it will take to be successful?

Just because demand is strong and the sport is growing, does not mean you can throw open a club and be successful. As they say “the devil is in the details”. How will you price? How will you market? How will you engage with your community? What skills and staff will be most important? Thorough planning in advance on these issues is important, but you also need to be flexible and willing to pivot based on real world conditions. Which bring us to question #3.

3) Are you cut out to be an entrepreneur?

If you’ve already launched a business (and liked it), skip this section. There are many smart, really good business people who find entrepreneurship too risky, too stressful, too unpredictable and too crazy. In a startup things will go awry….and then you try new things. You’ll often rely on your ‘gut’ versus hard data. You’ll wear virtually every hat and need to be OK with that: HR, finance, marketing, branding, operations, IT….and more. You’ll need to be available 24/7 and be OK with that. You’ll need to change tactics on the fly and be OK with that. You get the idea. If you ARE cut out to be an entrepreneur, you’re more likely to answer yes to question #4

4) Will running a pickleball club be fun?

Every business has its own challenges and stresses. But even if you make money and are a good entrepreneur, you need to like the business. No one wants to be “biz-erable” in a job, its not worth it. Having fun running a club probably means you love to play pickleball, you love the culture and community of pickleball and you enjoy your customer base. Only a true people person is likely to have fun running a pickleball club….if you’re not, be sure you find one to be the face of the business!

Pickleball clubs: a variety of approaches are emerging

Over the past 6 months we have fielded dozens of inquiries, and engaged a number of entrepreneurs to consult around their planning and startup. We are struck by their energy and passion — but also by the wide range of strategies and visions we’ve encountered.

Locations

As an example, we have brainstormed the pluses, minuses and issues around a variety of potential locations

Standalone former retail buildings
Former movie theaters
Common areas of indoor malls that have withered
Industrial park warehouses
Airplane hangars
Building from scratch in parking lots
Re-structured office space
Purpose built from scratch
Indoor/Outdoor combined concepts

Scale

One of the first decisions is the scale of the operation. Some are considering 4 courts with almost no amenities, a stripped down mode. More commonly, we are working on plans for 8, 10 or 12 courts. We’ve also discussed 18-24 court models and the issues around that scale

Another key discussion related to scale is how much square footage and energy will be devoted to off-court activity. Notably food & beverage, but also common areas, retail, and ancillary activities.

Revenue and pricing

There is quite a divergence in approaches relative to revenue. Some folks are “all in” on recurring revenue in the form of memberships. They have players paying monthly dues for unlimited play and benefits. Others have determined “pay as you go” is a better model. We’ve analyzed both these approaches and a number of combined approaches as well. What we recommend depends on a number of factors: competition, demographics, personal vision and more.

Another issue related to revenue is the development of multiple revenue streams. We believe the more offerings you have, the more likely you are to optimize your sales and net income. We’ve done a lot of thinking about how to weave this approach into an overall business plan.

The wild wild west

The reality in this market is that it is early days. Hundreds or even thousands of new pickleball clubs will be opening in the next few years. Because it is early, there aren’t yet clear-cut, proven operating models. Innovative entrepreneurs are creating the market as we speak. As in any business, the operators that listen to their customers, adapt to their desires, and execute effectively will thrive. For true entrepreneurs this is gonna be a fun ride.

4 things you should think about if you decide to start a pickleball club

Over the past year, we have extensively researched the pickleball clubs that are blossoming around the country. We have also completed revenue assessments, feasibility assessment and business plan elements for a number of entrepreneurs.

No two clubs are the same, but the ones that have experienced success have a few things in common. They have done a good job of addressing ‘critical success factors’ that make a difference.

1) Programming

Successful clubs are not primarily court-rental businesses. They create loyal players through creative programming that optimizes inherently limited court availability. Programming ideas and required staffing need to be in your plan.

2) Revenue streams

Every club will have a variety of revenue streams and your vision for your facility will determine how each of these will impact overall profitability. The essence of a good club revenue plan addresses each revenue stream in detail and considers both the marketing and the execution.

3) Staffing

If you’ve started any modeling at all you’ve seen that after your monthly rent, the largest ongoing operating cost is staff. The starting point in assessing staff is to identify key business tasks and then determining how many people (and what kind of people) are needed. Important: what are YOU (the owner) going to do? The more you do, the less staff you need and the better your margin will be.

4) Targeting multiple markets

One of the reasons pickleball is exploding is because it’s attracting an incredible variety of ages and demographics. What other sport attracts kids, seniors, men, women, athletes, and non-athletes, from all income brackets? Hmmmm. This is great news if you’re opening a club, it also means you’ll need to think through a variety of marketing approaches for each segment.

Each time we visit somewhere to play, we learn a bit more about this market! Pickleball Business Advisors is brothers Bill and John Pryor. We provide a variety of consulting services based on extensive experience in fitness business development, and research into the fast growing pickleball marketplace. To initiate a feasibility assessment for your pickleball club, or for other consulting, contact us so we can learn about your project.

Indoor Courts or Outdoor Courts?

You’re building a Pickleball club, and you want the most attractive court setup for building a loyal player base. Do you build indoor courts? Outdoor courts? Covered courts? Or some combination of the above. Well, it depends….but I’ve got a preference — you can skip to the end here and find out what it is.

Outdoor courts

Ok there is no question that playing outdoors, on a beautiful day, when the sun is at the correct angle, when there is no wind, when the temperature is 60-80 degrees, when the courts are dry and when there is no smoke in the air….is an awesome experience. Unfortunately, as a business owner, you have zero control over any of those factors.

The most beatiful outdoor pickleball courts I ever played on were in Princeville on the island of Kauai in Hawaii. Guess what, Princeville gets over 90 days of rain per year….if those courts were a business, at least 25% of the available court time would be eaten up by weather.

Indoor Courts

No, you cannot replicate the outdoor experience indoors, but you can create consistent, predictable, high-quality court conditions 365 days a year. You may lose some perfect-weather business to outside courts nearby, but there is a core of players who crave the regularity you can create with indoor courts. Indoor courts have a different financial profile in terms of build out and maintenance but at the end of the day, you control the experience.

Hybrid Courts

A middle ground, if your real estate permits, would be covered courts or courts with movable side-walls or curtains. This allows some play during bad weather, but also allows the fresh air experience under a roof in certain conditions.

Summary

The reality for most club starters, is that this decision will be driven by the real estate available in the area you are considering. That said, your core court strategy should be a solid base of indoor courts (or hybrid courts if they can be closed and climate controlled) that allow consistent, year-round play. If real estate permits you to supplement this with some outdoor courts, all the better. The better climate you live in, the more helpful outdoor options might be, but
I believe this ‘primarily indoor’ approach makes sense in virtually every region of the country. MORE IMPORTANT THAN INDOOR VS OUTDOOR COURTS is the community, programming and vibe you create at your club.

Pickleball Programming

Throughout this blog you’ll see references to “programming” as a critical success factor in pickleball clubs. We’re developing a full handbook on this topic, but here are 7 reasons we feel strongly it will impact business success if you’re considering a pickleball club.

Programming allows ‘court optimization’, the usage of your most precious asset: available court hours
Programming is a powerful tool for indoctrinating new players, the lifeblood of your business
Programming is one of the main ways to promote player interaction and nurture the community vibe that drives player loyalty
Programming as a way to infuse variety into the player experience
Programming helps accommodate players with different goals, abilities and expectations regarding pickleball
Effective programming will create a unique position and competitive advantage for your pickleball club
Programming can create important ancillary revenue streams to help your overall business.

Any Pickleball club business plan without a thoughtful approach to programming is ignoring an absolutely critical success factor.

Pickleball startup or pickleball franchise?

It is very early days for pickleball clubs. The good ones so far have been launched by talented entrepreneurs who have proven out the model. Until very recently there have been no franchises available. That will soon change. Several companies are selling franchises, but there is no track record of successful franchisees yet.

If you want to own a pickleball club, you really have two choices, startup or buy franchise. Which is the right path for you? Consider the pluses and minuses

Launching a pickleball business from scratch

You will have total freedom to present your own personal vision
Financially you will operate without paying franchise fees
You will avoid a significant “buy-in” cost
You will control every aspect of the business including pricing, marketing and programming.
You are free to change directions based on trial and error

On the other hand…

There is so proven blueprint to follow
The learning curve can be steeper
There are no colleagues to compare notes with

Buying a pickleball franchise

No search process for suppliers and technology
Design and construction plans are provided
You are able to view financials of like businesses
Marketing, pricing and branding elements are provided
When you decide to exit, other franchisees are good potential buyers

On the other hand…

You need to choose your franchisor very carefully, there is virtually no track record for the ones available today.
Potential profit is impacted by royalty and other fees
You may have operating restrictions (for brand consistency) that you don’t like
You may not have freedom to switch gears on the business should conditions change in your market.

We have experience helping entrepreneurs evaluate both of these paths. If you would like to discuss your vision for a startup, or need help evaluating franchise opportunities, we can help.