How to Generate Funds for Unforeseen Costs in Your Indoor Playground Business

How to Generate Funds for Unforeseen Costs in Your Indoor Playground Business

What can I do, as a small business owner, to cover emergency costs?

Even though every small business would ideally have an “emergency” fund and a large cushion in case of unforeseen costs, that’s not always reality. No matter what industry you’re in or how your indoor playground is structured, there is ALWAYS something that needs attention or maintenance or updating or fixing, and that emergency fund depletes itself pretty regularly.

But what happens when a LARGE unforeseen cost presents itself?

We have faced at least one major unforeseen cost per year here at Climbing Vines and have had to figure out how to handle it on the fly. The first year, we mistakenly did not plan well for the summer season and as a result, had about $5k in bills we couldn’t pay. While those were not technically unforeseen costs, it WAS unexpected that we would not be able to pay for them as we normally would. Our second year, we had hired a new accountant and accidentally grossly underpaid our sales taxes, resulting in a $4,000 bill.

Our third year, our very expensive $5,000 espresso machine completely broke down and underwent dozens of repairs before finally needing to be replaced. This was one of the most stressful situations we could have imagined, as our espresso drinks are a huge attraction for our business. After using our personal savings to cover the first two cases, we had to generate a decent sum of money in a short amount of time to cover this cost.

Before I share how we raised the funds, I want to note two important things here.

  1. This strategy can be overused-- so be careful to limit it to once per year

  2. Keep its execution in-house and avoid using third-party sites like Groupon

My first instinct was to look at our current offerings and break down the numbers. I thought, well if we can book 50 birthday parties somehow at $100 each, that will cover the cost because that is what we did in the past. But that was not a good idea. I would need to give something away to entice the bookings to come in quickly. My usual go-to giveaways were unlimited coffee and tea, a $35 value but something that actually costs us very little. This was not a good strategy because most people were already adding those pieces on and paying full price. It was also not a good strategy because we book almost 100% of our party slots, especially during our busy season, without needing to give anything away or offer discounts.

So while I was preparing for the usual “party push” sale, I found a case of mugs in storage that had about 35 “Climbing Vines” themed mugs inside. My first thought was to order 300 more and sell them for about $15 each to our best customers. I presented this idea to my husband, who immediately pushed back against the idea of spending more money we didn’t have in order to make money we really needed.

Instead, he challenged me to think of those 35 mugs in a NEW light. He urged that I could make the money we needed ($5k) from just those 35 mugs if we packaged them the right way. If you just did some quick math, that’s about $143 a mug, so of course, I thought he was insane.

BUT, he sketched out an amazing package that would sell for between $99 (for single-child families) and $200 (for families with up to 3 children) and would not cost us much at all. Most importantly, would not cost us anything upfront.

The key here is that whatever you are packaging together should NOT cost you a lot but be very valuable to others. Choose high margin items whenever possible. For us, the highest margin item is an open-play pass.

Therefore, we started with a 10-pack of open play passes which ranges from $99 to $200 depending on the size of a family. So, with 10 open-play passes and the $15 mug, we were already providing more in VALUE than we needed to charge.

We decided to throw in an EXTRA 5 play passes (a $40 value) AND an event pass (around $15 each) for each child in their family to sweeten the deal. Since coffee is also a very high margin item for us, so we also threw in a FREE coffee (with the use of the reusable mug) for each of their purchased visits in the package.

So, if a family with one child purchased the $99 package, they would get 15 play passes, the coffee mug, 15 free coffees, and an event pass-- totaling $165 in value. If a family had even more children, they’d save even more.

We set up a quick sales page for people to choose their options and even added in a few upsell options. We posted the page on our social media channels and emailed it out to our list and chose not to use any ads for this promotion. I also posted videos personally thanking people when they had bought the VIP offer, which got a great response (and didn’t cost us anything except a few moments of time!).

We were able to sell 20 in the first few days and ALL 35 within the week, reaching and even surpassing our $5k goal. I was absolutely shocked that we were able to make that amount from just 35 coffee mugs that had been sitting in storage for over 2 years. 

But again, it’s all about serving your absolute BEST customers at the highest level. I knew that even customers that visited us often would visit even MORE if they could, and that families with multiple children were most likely to jump on a sale offer since their visits to our cafe cost more than single child families.

While this strategy was able to help us out in a pinch, you must be careful to NOT overuse this strategy. If you do, you risk everyone waiting for your NEXT sale and never paying full price again. However, this is a fantastic and easily repeatable way to generate a cash cushion when you need it most WITHOUT sending much upfront.

I talk about this strategy in even more detail in my Play Cafe Academy course bonuses. If you haven’t checked it out yet, visit the PCA site for more information.