Introduction

Developing a climbing gym from the ground up can be a daunting task, especially when you are just starting on this journey. This post will briefly overview the phases associated with planning, starting and operating a climbing gym, and the role that ClimbCalc, a build-up financial modeling tool, plays in these. ClimbCalc's forecasting features aim to serve both existing operations and startups that have not yet reached opening day.

So you've decided to open a climbing gym

If you have realized that your future self would thrive as a climbing gym owner, congratulations! That is an incredible feeling and can drive a lot of motivation and excitement toward the task of opening your first gym. It can be easy to find yourself lost in the weeds of questions, followed by understanding, and then more questions. Unguided, this process can quickly extend into many months or years. Given this, it is recommended to seek professional assistance from those with experience on this subject and in the industry if you are serious about opening your first gym. The main phases related to opening a climbing gym are outlined below, with an emphasis on the areas ClimbCalc is most suited to assist with.

Stages involved in opening a climbing gym

Opening a climbing gym can typically be divided into four distinct stages, from the initial formation of the idea to post-opening day. The stages where ClimbCalc plays a prominent role are highlighted in orange and blue in the block diagram above: design and operate, respectively.

Strategize: This stage is primarily concerned with fact finding within the target market, forming a clear vision of personal goals for the project, defining the business goals, and developing a team building strategy. The steps within this stage are all incredibly important and skipping or rushing any one of them could result in major issues throughout the entire length of the project. With a clear vision of these concepts, the details determined in the following stages will fall into place more efficiently and effectively.

Design: The design stage is where many projects can stall for a significant length of time. Forming requirements given the market, team, and other constraints is an exhaustive challenge, and just one step on the journey towards opening day. This stage of the process typically involves fundraising from lending institutions and / or equity investors. Achieving this will likely involve forming a business plan, pitch decks, financial projections, and other planning documents. ClimbCalc is particularly well suited to assist with these tasks.

Build: Constructing a building from the ground up or readying a leased space to suit a climbing gym is a gigantic task. It is highly recommended to find someone with experience in building climbing gyms to assist you with this portion of the project. By the time the letter of intent is signed it is wise to have a firm understanding of how a gym in that market in the given space will perform financially. The space and its location are relatively fixed at this juncture and will significantly shape the budget alongside all future financial outcomes, including the return on investment.

Operate: Congratulations, if you have made it to this stage then you have constructed a climbing gym and are nearing opening day. At this point it will be critical to validate the key assumptions about the market's size, your business model, and the financial projections. From here you can dial in parameters, forecast budgets, and project future performance of the business. ClimbCalc is positioned to assist with all of these tasks.

Iterative design & analysis

Tackling any complicated project is likely to require breaking down that project into smaller, more manageable tasks. Each unit or portion of the project will have its own constraints and specifications, that when summed together will form the complete set of requirements that meets the needs of all stakeholders. Note that this final set of requirements is often a result of many compromises with reality and other constraints. In engineering, this task is typically solved via an iterative design process. This is displayed in the block digram above and the steps can be summarized as follows:

Plan: Gather and define objectives, criteria, constraints, requirements, and specifications. It is important to consider the personal and business goals defined during the Strategize stage of the preceding section. These more detailed and precise plans will need to align with and advance the entire project in the defined strategic direction.

Prototype: Develop a version of the system that aims to meet the objectives and requirements defined for this iteration of the cycle. ClimbCalc was created to help you build out your design on paper to forecast and gauge suitability of the design to meet your objectives. It is wise to map out a few tiers of performance in case your core assumptions around market size or similarly impactful values vary by the time you reach opening day.

Test: Evaluate the prototype against the objectives, requirements, and specifications defined in the planning phase. As design parameters are adjusted in ClimbCalc the financial projections and other calculations will automatically update, allowing you to quickly test the impact of your changes to the design.

Analyze: Review the results of the test phase and determine the next steps in the iterative cycle. In ClimbCalc, this exercise could take the form of modeling margins and competitiveness with nearby team programs when considering student-to-staff ratios, or the impact of an additional set of summer camp programs on the overall profitability of the business.

This process of refinement involves paying attention to the details at each step, and in general the more targeted the process is towards achieving the objectives and the more efficient it is to complete a cycle, the more likely the project is to be successful.

With input parameters available for nearly all modern climbing gym business models, ClimbCalc significantly speeds up the process of iterating through the entire design & analysis cycle of formulating a new climbing gym targeting the needs of a specific market. Furthermore, it becomes a click of a button to update all financial projections when quotes from vendors become finalized, the architect comes back with layout changes, or other shifts occur over the course of a project.

This makes it simple to reduce uncertainty, keep investors in the loop, confirm budgetary constraints are being met, and forecast financial impacts to the business as the design cycle iterates.

Analysis steps involving ClimbCalc

Market Data: ClimbCalc's current version focuses on helping users forecast their operation given specific parameters about the target market. In general, achieving the most representative results with ClimbCalc will require gathering the most accurate data to input into the model. This will require you to thoroughly understand the market you are targeting. ClimbCalc will initially ask you for the number of members in your target market that could reasonably belong to the gym, as well as the price point memberships will be sold at. Both of these heavily rely on the user's knowledge of the demographics within the catchment area surrounding the target gym location. If you need assistance with this, it is recommended to reach out to Climbing Wall Advisors in Boulder, who offer a service to quantify the likely member counts within a given market at a specified membership price point. I have written more on this subject here - Market Analysis.

Inputs - Requirements & Design Parameters: The Design column is the primary way to interface with ClimbCalc. Input parameter values should be modified to reflect what is required to achieve the personal and business goals formed in the Strategy stage discussed earlier in this blog post. ClimbCalc's interface responds when a value is changed in the design column on the left, with an update to the projection on the right. Note that many tradeoffs can be observed. For example, increasing the number of routesetters will decrease the route turnover time, but at increased cost. Continuing this example, having quicker route turnover in your market could result in a competitive advantage, pulling members from nearby competitors or reducing churn, which could justify an uptick to the modeled member capture percentage input. Exercise caution during these types of exercises. It is recommended to remain conservative with estimates in general, and certainly when modeling a new gym with no proven history.

Outputs - Financial Projections: As the inputs are being updated by the user, ClimbCalc will generate a set of financial projections for the business. This will include a forecasted income statement, cash flow statement, and balance sheet, among many other key performance indicators. These outputs are critical to understanding the future financial health of the business and can be used to make informed decisions about the project. The values presented are also highly beneficial towards forming a business plan and pitch decks for achieving funding from investors or lenders.

ClimbCalc is still in early beta and I will be updating this post and other posts on this blog as well as documentation on climbcalc.com as I find time and when new features are developed and refined. If you have any questions or feedback, please reach out to me via email.