Tennisanlage wachsen lassen trotz Platzmangel

0:00Unternehmer/Gast I sell tennis lessons, pickle ball lessons, with a brick and mortar business in Chatham, New Jersey. Yes, a lot of balls. Revenue is about $3 million and we're three. We're trying to get to 10, but the biggest problem is supply. We can't seem to find enough space to satisfy the clients. >> Okay, so it's a brick and mortar constraint, like a physical constraint. >> Um, I mean, pickle ball is it mostly pickle ball that's like blowing it up? >> No, it's actually mostly tennis.

0:27>> Oh, >> Pickle ball is just filling the dead spot. >> Interesting. >> Yeah. >> Cool. >> Pickle ball is not a great margin business for us. >> Noted. >> Yeah. >> Okay. Um, but you have a model. What are the margins on the three? >> About 22%. >> Okay. Um, and is it mostly lessons or is it court time or like what how's that split? >> It's mostly all lessons. Court time is kind of dead, too. It's all lessons, clinics. >> One-on-one or is it one-on-one? >> One-on-one and group clinics. >> Okay, both. Got it.

0:52>> Yeah. >> Um, okay. So, I mean, you kind of you have a I mean, you have you have a you have a big strategic decision right now. >> Yeah. >> Um, because either you can keep tweaking your model and try and, you know, expand margins by basically driving price, tweaking offer, improving sales process, but you're maybe that takes you from three to four and you go from 600k to a million or a million two in profit. If that's like the only life goal, then like let's do that. If you're like, I want to build America's next tennis facilities, is that what you want to do?

1:23>> Yeah, that's what I'm trying to do. >> Okay. So, and this is one location you have? >> One. >> Uh, square footage? >> 45,000 square feet. >> Damn. >> Yeah. >> Geez. >> Yeah. >> God zoops. >> So, that's the constraint. I'm trying to find A lot of balls, Alex. A lot of balls. >> I'm trying to find spaces like that, which are really hard to find. >> Yeah. >> Big buildings like that. >> [sighs] >> Hopefully this doesn't doesn't sound bad. Revenue sounds low for 45,000 square feet.

1:51Alex >> I don't know. We're I don't know. Maybe we should Like Ed was saying, I should just charge them more. >> Yeah, I mean, that's the the immediate thing of like how do we go from 600k to a you know million plus in profit? Yes, that would be like something like if you're supply constrained and you have more demand than you can handle, that would probably make sense. Um So, I would I would look at that and uh like this would probably take a we'd have to look under the hood and like really do a deeper dive. But basically, I would look at square footage, sorry, revenue per square foot based on service category.

2:21Alex >> Okay. >> And I would I'll tell you a story that will illustrate the point. So, um really good friend of mine, Rick Mayo, he was at the launch. He's the guy who owns uh Alloy. Thank you. Uh he owns Alloy uh personal fit uh personal training. And so, they he had one store that did 3 to 4 million a year, which was a super you know super duper store whatever it was really big for the that gym was like 8,000 square feet. And when he looked at his whole model, he had a juice bar, he had PT or you know personal training, he had semi's, he had group, he had a whole bunch of different stuff. And he ran really good margins and he was you know always on stages whatever.

2:54Alex When he started to start the franchise, he looked at all of the different service categories and looked at the one that had the highest revenue per square foot, lowest CAC to LTV ratio, which was semi-private. That was the that was the model that the it three-person model could run on 1,200 square feet, could do 5 600k top line, 50% net margins on average, like crushed, but very micro model. And so he pulled that out and then that was the piece that he started duplicating. So, the model that you have you might have hidden within your model, the real core economic engine, I would want to look at all of it. And then I'd be like, all right, well, if we can can we find 8,000 square foot, you know, or or you know 20,000 square foot that are maybe a little bit easier that we can find those in more states. Um so we can start expanding cuz we basically have to nail the model and then we scale it. Um but I would want to dive in more before I'd be like, let's go break everything.

3:38Um so, the immediate thing is pricing and offering sales process cuz that's like immediate double [snorts] for profit, which is probably sitting right there. The second order is going to be like, let's look at all the economics and pull out the core engine and then replicate that. >> Because funny because when we had three courts, we expanded our margins were a lot higher in the micro kind of facility. It was like 45%. So, I should just try to build micro facilities. Chill.

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