How children’s activity centres can maximize revenue ?

July 19, 2017
Godwin Vargheese
 Increasing revenue with additional activities


Increasing revenue with additional activities

In today’s business world, just setting up a new enterprise is rarely enough to ensure sustainable cash flows. Customer demands keep changing, and new advances in technology bring newer possibilities for a customer to enjoy the same type of product/service. This is extremely evident in the education sector, wherein an industry limited to schools and colleges now include a plethora of products and services, including learning apps and activity centres.

To ensure success and sustainability, business diversification is extremely important. It ensures that you keep up with the ever-changing business needs and are able to capitalise on any new developments in the environment.
An ideal diversification strategy should keep in mind the following factors:
1. It should not be too capital intensive (which might put the original business at risk in case the new product fails)
2. It should stay in line with the core business and core competencies of the company

Activity centres have a special advantage when it comes to maximising their business potential. Unlike other industries, product diversification here is not capital intensive. As a business owner in the education sector, especially after you have invested a significant amount of your time, money and resources in setting up an activity centre, adding an additional activity is the perfect way to diversify your offering without major capital expenditure. More often than not, your activity centre will already have most of the infrastructure already in place and very slight modifications will be required to add a new activity.

Robot building

Activity Centre

The addition of other activities also works towards increasing the completeness of your activity centre’s offering. You can take inputs from your customers regarding what areas of development in the children they would like to see and add activities accordingly. This also ensures that participating children, as well as adults, have something new to look forward to and have a much more well-rounded experience.

Profit Maximisation

What is most interesting here how the pricing structure can be modified with the addition of each activity to create a disproportionate increase in profits of your activity centre. Suppose your activity centre has 5 activities. When you add a sixth, the value of your offering increases by 20%. However, since the cost of adding the activity will not include the high capital investments you have already made, the increase in cost will be much lower than 20%. Since customers are generally willing to pay based on the offering and not the cost incurred by the company, your activity centre is assured a significant increase in revenues.

To conclude, even if you are running a successful activity centre, there is always room for doing more. And since the addition of new activities can significantly increase revenues at very little additional costs, it should always be on the mind of all entrepreneurs in the sector.

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