Johnson Reed finances new Soft Play Centre in Sheffield

Johnson Reed
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Sipra Dib opened Play Arena, a large Family Entertainment Centre with a soft play area in Sheffield in August. The multi-faceted business offers a huge variety of play events for a wide range of age groups and abilities.

Babies, toddlers and older children have their own exclusive soft play areas, including a huge soft play mainframe, while the award winning Comfyland Experience™ provides a unique educational oriented play area for children aged 1-6 years. Budding Michael Schumachers can rocket around the arena kart track, the arena rollerslide provides an alternative for all ages to standard slides, and the arena air-cannon shooting range and arena sports area top off the experience.

Dib had spent the previous five years as a science teacher, having been a research scientist for the 10 years prior to that. As a mum of three, she had also spent a lot of time over the last few years visiting play centres with her children. “The idea came from the fact that I’d frequented so many of these places and I thought I could do it myself. It is a lot different running the business to being a customer obviously, but I think my ability to look at things as a customer is extremely useful. Combining that with my background in the education and development of young children gives me a good understanding of the needs of the children who play here.”

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What all new operators find, of course, is that they also need to have, or develop very quickly, an astute financial brain, as finding funding for new business is a far from simple process in the current economic environment. Dib secured funding for several parts of her centre from Stockport-based Johnson Reed.

“I knew the market conditions before I entered this business and I wasn’t prepared to put my house on the line, so securing soft play finance was always going to be a challenge,” she says. “I secured a bank loan, which covers some of the funding I required, but I had explored several other options for further soft play finance before I was recommended to talk to Johnson Reed by a couple of other play providers.

Other firms I approached had either failed to phone me back or not given me the answers I needed, but as soon as I spoke to Mark Johnson, I felt very comfortable that he understood what I needed.

“Johnson Reed didn’t pose me problems, they just have the kind of people who are there to find solutions,” says Dib.

A key aspect for any new operator seeking soft play finance is a sound business plan, and Dib put a lot of time and effort into perfecting her plans for Play Arena. “I was very thorough and provided a profit and loss forecast for the first three years, based on existing play centre figures. Every part of the plan was well thought through and clearly explained from a financial perspective and, as it was the first thing every finance provider wanted to see, that proved crucial.

“It definitely helped that my husband has run his own business for a number of years and although he is not part of this business, he has shares in Play Arena. That brought some obvious stability to the table.”

The process with Johnson Reed was extremely smooth, she adds. “The first thing they needed to see was proof of income streams, what we already had available to us and what we required. Then, they ran the requisite credit checks and based their decisions on that.”

Initially targeted for soft play funding, Johnson Reed eventually financed the soft play, outdoor play, catering equipment, security systems and IT systems. “I knew Johnson Reed was an active soft play financing businesses, so mine was certainly not an alien concept to them and they were not going to simply say ‘no way’. I also very quickly came to realise that there was more to them than soft play and we could look to fund the different elements of the business through Johnson Reed, which was a bonus.”

Mark Johnson says: “While we often provide soft play finance ourselves, we also have access to a panel of lenders and that really came up trumps on this occasion. We found the desired level of finance from five different underwriters, each of which has financed a particular aspect of the Play Arena business.

“Within our panel, we have the umbrella sector expertise that our indoor play clients are looking for, but we can also drill down into levels of niche understanding that you just won’t be able to access from the high street banks. Because of this knowledge, we were able to secure low-deposit finance for Sipra, which was secured without charges on property. We were also able to make that finance available on a very quick timescale that fitted with the schedule she was working towards.”

Four months into the new venture, Dib admits it has been tough to date. “I have to admit the first few months have been testing. Things are tight at the moment and people are understandably being very careful with their money. The numbers through the door haven’t been what I was hoping for to date, so we have focused heavily on making sure that everything we do is to as high a standard as possible, while balancing that with keeping a very tight ship. We have high overheads, which I always knew would be the case, and we went £100,000 over budget before opening, so it is definitely a fine balance at the moment. It feels a bit backs to the wall, but all we will do is keep moving forward and believing in our ability to deliver.”

Play Arena could not have got off the ground without secure funding however and Dib says Johnson Reed were a perfect partner. “Johnson Reed was the one company I never had to worry about during the whole process of setting the business up. Mark, Adrian and Amanda were all superb – they did everything they said they would do when they said they would do it, and I would most certainly recommend them to anyone in the indoor play sector.”

This article was originally published in the Indoor Play Magazine.