Do you know the best and worst case scenarios for your children’s activity business?

Children’s activity providers have needed to be incredibly agile throughout 2020.

Whether that was adapting venues to allow for social distancing, moving venues altogether, changing aspects of programmes, reducing expenses, amending terms and conditions or indeed moving online and learning new digital skills. 

We’ve has spoken many times throughout the year about the need to have multiple plans based on changing Government guidelines, and the importance of being able to react swiftly where needed. 

This will almost certainly be the case heading into 2021 also, and while we believe there are many reasons to be optimistic about the year ahead (read article), we also believe in being proactive about strategy and preparation for multiple scenarios.

We’ve outlined some potential scenarios below that may be useful as a starting point for your own 2021 planning.

Note:- this is not an exhaustive or exclusive list of scenarios. We’ve learnt this year that even those most ‘in the know’ have struggled to give accurate advice, so please take them as suggestive based on what is currently being discussed in the public domain and of course, any advice below will need to be tailored for the specific needs of your activity business.

Best case scenario

  • vaccine rolled out within weeks
  • this proves effective and drastically reduces infection rates, limiting chances of any further waves or national lockdown measures
  • economy picks up swiftly, industry and consumer spending strengthening
  • demand for activities remains high, often outstripping supply
  • venues are in sync with provider needs and open as needed
  • return to some forms of normality by Q2 and most by Q3

With this scenario, we’d see activity providers likely pick up where they left off pre-Covid. Assuming providers have maintained good customer contact and further built their audience online, sold out classes, clubs, camps and services are likely. Return to party bookings would be good news for many. Parents will be extra keen to get their children (and themselves) back into routines of in person activities once again and booking well ahead may become more common. There will likely still be a place for online activities, but in person activities will boom once again.

Providers will need to maintain good relations with venues (new and old) to ensure they can meet demand. They will need to be mindful that Covid-19 won’t necessarily disappear, so ensuring customers are, and feel, safe remains important. This return to revenue and profit levels mean providers can start to plan for growth and revisit business plans and clear marketing strategies, feeling more confident about investing in marketing, advice or new ideas.

Balanced case scenario

  • vaccine rolled out by Easter
  • this proves effective and reduces infection rates as expected, despite possible third wave and further lockdown measures
  • economy shows positive signs of recovery, industry and consumer spending improving
  • demand for activities is high with a balance across the sector
  • venues are in sync with provider needs and most open as needed
  • return to some form of normality by Q3/Q4

In this more balanced (and potentially likely) scenario, activity providers can look forward to returns to previous levels by the end of the year, possibly earlier. Assuming guidelines allow class sizes to increase as the year goes on, party bookings to be taken, clubs and camps to run as normal, we should see revenue and profitability strengthening as the year progresses. Customer safety will remain paramount ongoing and communication may be needed more frequently despite the slowing of infection rates. Growth plans can resume if previously on pause. Those who have developed new online services may need to use them for periods while their local area is in lockdown still, or potentially longer term if they’ve proved popular.

Worst case scenario

  • vaccine is either delayed or proves ineffective
  • infection rates don’t slow down causing more lockdowns
  • economy stutters throughout the year
  • demand for activities is high, but further lockdowns and guidelines forbid many operating as normal
  • venues remain cautious and many stay closed
  • return to some forms of normality only when more effective vaccine available

While not a scenario we anticipate, 2020 has taught us not to be complacent or assume too much. This worse case scenario would mean 2021 looking very similar to the year we’ve just had. We expect demand to remain strong, but guidelines would likely remain strict and therefore planning for low profits should be carefully considered for both the business and personal needs. Customer safety in activities and venues would remain paramount. This scenario would likely put most providers in survival mode, stunting growth further with investment in areas such as marketing needing to be very carefully managed.

What should I do now?
We recommend having multiple plans based on the above possible scenarios.
 This will then allow you to be ready for any changes needed to continue to survive both personally and for the business. Ensure you’ve planned effectively for the financial ramifications of all situations.

While we don’t expect the worst case scenario, we also mustn’t be naive to the likelihood that things won’t necessarily be as simple as the best case scenario. Like many things, often a more balanced approach to planning in business makes most sense in times of crisis to ensure you remain prepared.

Good luck as you plan for the future.

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