“What is an ROI calculator?” I hear you asking. “ROI” simply stands for “Return on Investment”. An “ROI Calculator” is just a tool that outlines the cost of something and generates what your anticipated profit will be over a certain length of time. Usually annually.
We should make a distinction between a simple ROI calculator (i.e. a widget built into a website with limited inputs), and a financial plan (complete with P&L, cashflow, and balance sheets). Both are going to try and do the same thing, but one is going to be far more detailed and accurate.
Roughly what we’re going to be talking about is a return on investment for your whole business, but return on investment can (and should) be used for lots of different aspects to your business to help you determine how best to spend your company’s money. Usually, though, that’s going to require a lot of detail that a simple widget can’t provide.
In addition to an increase in bank loans, more and more float centers have been using investors in recent years to finance their operations. Every center’s earning potential varies greatly — but a well-run center with no surprise buildout costs (or re-buildout costs) can do very well for itself.
As a result, people with means (or general interest) are increasingly likely to consider having a financial stake in the float industry without the glorious headache of actually running a shop.
If you are looking to open a center, at some point, you have to face the reality that you’re going to need to spend, and thus track down, a good chunk of money. There are many ways to fund a float center – personal capital, family and friends, sending travel funds to the exiled Liberian prince that you met on the internet and using the forthcoming reward money, etc. This post, however, will focus on financing using bank loans.
In this post, we’ll be looking at those enigmatic acronyms: TAM, SAM, and SOM, which are the backbone for the market analysis section of your written plan. We’ve helped a couple hundred float centers to develop their business plans, and we’ve found that this one area generates the most questions, and seems to generally be the most difficult to wrap your head around.
On our journey we found at least three owners who are actively looking to sell their float tank centers, and in all three cases the centers are doing well. Life often calls us in different directions than we expect.
In case you’re in the market for a pre-established business, without all the trials and tribulations of starting from scratch, here’s information on two centers that are, for the moment, available to swoop in on…
Construction permits differ from state to state, and even from county to county. Keep in mind that everywhere has its own quirks, and, more than likely, it’s own unexpected fees that can cost several thousand additional dollars…