Starting a Sports or Recreation Business
This story appears in the November 2002 issue of Startups. Subscribe »
Back away from the couch. Turn off the TV. Put down that bag of chips. Millions of Americans hear that message daily, and millions heed the call: They exercise. According to SGMA International's 2002 edition of Sports Participation in America, the annual bible published by the Sporting Goods Manufacturers Association, 86.1 million Americans are frequent sports participants-and 83.6 million occasionally participate in the fitness game.
That's a lot of potential customers-if you own a sports and recreation business, that is. Depending on your area of interest, the possibilities are endless. For instance, if you're an exercise-inclined entrepreneur who dreams of the day you can run your own business, then why not aim for the runners of America? There are 30 million of them nationwide, according to the Textbook of Running Medicine. Or dive into the swimming market: 93.6 million of us are regulars at the beach or pool, according to the SGMA.
American Sports Data tracks 103 sports and recreational activities, so there isn't much shortage of what shape your dream business could take. But first you have to back away from the couch. Turn off the TV. And put away those chips.
What's Out There
Intimidated because you think the big corporations like Nike have already conquered the sports and recreation world? Don't be. There are more than enough opportunities out there. So much so that even Nike would probably encourage sports- and recreation-minded entrepreneurs to "Just do it." You're only limited by your imagination, so arm yourself with some statistics, and we'll try to help you brainstorm.
According to the Outdoor Industry Association, young adults between the ages of 16 and 24 participated in at least one human-powered activity in 2001, which was a modest increase of 3.6 percent. Human-powered activities? That would include pastimes like kayaking, canoeing and backpacking, which were all part of that 3.6 percent. And so you could start a business that's involved with manufacturing or selling kayaking equipment, paddles or backpacks-and, hey, if backpacks interest you, you could offer a product line that appeals to everybody from the rugged mountaineer to a 12-year-old who has too many textbooks for his two arms.
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Echoing our thinking is Mark Beal, one of several partners at New York City-based Alan Taylor Communications, the country's leading sports marketing and public relations company. "Sports is not the three or four major leagues," says Beal. "It's the amateur level, the professional level, the grassroots level. There is a lot of opportunity out there, and if you have blinders on, and you just think of professional baseball, basketball and football, you're missing a lot of opportunities, many of them in your own backyard."
So start looking in your backyard, and start thinking. For instance, across the United States, the Rails-to-Trails Conservancy is a nonprofit organization that funds and promotes the idea of turning abandoned railroads into bicycle paths. By the end of 2004, it's estimated they'll have 15,000 miles of bicycle paths across the country-stretches of paved trail that stretch for miles.
Yeah, so? Well, if one of these rail trails is near where you live or where you'd like to live, you could rent bicycles to these people. Or if you just like bicyclists but don't want to rent cycles or repair them, you could feed the cycling crowd, with a chain of snack shacks offering everything from power energy drinks to ice cream sodas. (Families ride on these trails, too, you know.) Or think of the nearby skateboarding parks that might offer an entrepreneur some business opportunities-selling skateboards, repairing them, selling bandages, you name it. These are all ideas worth thinking about, but: "You have to be in love with the market you serve," says Ray Pelletier, a motivational coach in Miami Lakes, Florida, who specializes in motivating coaches and players on the university circuit-which, hey, is another area of sports, or another type of career, that you could be thinking about.
"Sports is really branching out into a lot of different areas," notes Beal. "You see it with extreme sports, and a lot of adventure racing and endurance sports. If you think back to the 1970s, you always had your mainstream sports, and those are still very strong-tennis, football and basketball, for instance. But there are newer things that have sprouted up, and they're not going away."
Coaching, Teaching and Marathon Organization
Coaching
"Those who can't do, teach," goes the old saying. Teachers around the world probably wince every time they hear that, especially if you're Melissa Dostis, who spent 15 years in competitive ice skating and now runs Total Body & Soul Inc., having started it just after graduating from the University of Delaware. She's using her skills as the foundation of a coaching business. She focuses on ice skating, but she understands the importance of diversification, having trained football, soccer and lacrosse teams. Her fees can range from $30 to $60, depending on the time involved, and the beauty of coaching is that your start-up costs are virtually nonexistent. You're selling knowledge, not fitness equipment.
Dostis, who will be 25 in December, opened her business right out of college, in 1999. It's still in the start-up phase-Dostis has no employees, but she insists she will. She says her business is growing at about 20 percent each year-and it's lucrative.
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"The biggest thing I've learned about this business is that it is a business. You're doing something you love, and working with kids, and it is very personal, but it is a business." And does Dostis ever wish she were carrying a briefcase to work every day? Doesn't sound like it. "Honestly, stick with what you love," she says. "That would be my advice. I have so many friends who are in jobs that they don't love. I love going to work every day, I look forward to spending time with everybody I work with."
Teaching
The differences between coaching and teaching are subtle, but they're there. A coach is generally working with somebody who knows what they're doing but needs to know how to do it better. A teacher is often working with complete beginners.
In any case, Sam Drevo, 26, runs Northwest River Guides, which opened in 2000. He works with about six subcontractors, and next year, he believes he will hire his first employee, and maybe his second. Still in its infancy, his company's revenues are just shy of hitting six figures.
But Drevo isn't concerned. He really isn't in this for the money. "Obviously, this isn't a get-rich-quick scheme," admits Drevo, "but I consider myself rich right now, or semi-retired right now, because I do what I love. An entrepreneur once told me, 'Do what you love, and the money will follow.' I'm a true believer in that statement. It's just a matter of time, perseverance and trying not to make the same mistake twice, and things will work out."
Indeed, they are for Drevo. As he becomes known in his field, he's been invited to do kayak commentary for NBC sports, and he's producing his first instructional kayaking video, which is sold around the world and which he markets to his students.
And he may not be a millionaire yet-but consider the perks. This December, he'll be leading whitewater rafters in Costa Rica, and he's always in the water, whether it's instructing in a swimming pool or a river. He charges anywhere from $45 (for a class in the pool) and $85 (for a class in the river) to $420 (for a certified workshop in whitewater rafting) and $1,800 (for an actual trip, such as the journey to Costa Rica). And persuading people to spend $45 or $1,800 isn't as difficult as you might think, insists Drevo: "Passion is infectious, and anybody who has passion for something can draw people in. So it's never been a problem for me to get people to kayak."
Run Your Business-Literally
Anton Villatoro, 32, and Chuck Trujillo, 36, are the founders of the Mile High City Marathon, in Denver, of course. You wouldn't think of a once a year event like a marathon as a business, but it is. For three years now, Villatoro and Trujillo, marathoners themselves, have spent all their energy and time on making sure they pull off a race of a lifetime.
It can be a profitable business, but a challenging one, admits Villatoro. They haven't reached their maximum goal of participants yet-5,280 runners, which would bring in well over $300,000 of income to their business. In last September's race, 1,500 marathoners turned up, and so they once again fell short of their ultimate goal; but the numbers are promising, considering it's still a new race that athletes nationwide are learning about, and the high-altitude terrain is a harder sell than Boston or New York City's.
"Expenses are relatively fixed," said Villatoro in a hurried e-mail two days before the big race. "Various costs [are] attached to the runners, [which they pay for], including race T-shirts, time services and race numbers. The largest fixed cost is that of the Denver Police Department, which was $52,000 last year."
Cash flow-flooding in before the race, not so much after-is tricky, admits Villatoro, who ironically can never run in his own marathon, since he and Trujillo are too busy putting in on. Ultimately, Villatoro and Trujillo intend to create spin-off marathon events throughout the 12 months to generate more excitement and income, and they envision duplicating their eventual success in other cities. If they can pull that off, their business should have a nice, long run.
The Most Important Rule of the Sports Business Game
It can't be said enough, with any business that you plan to begin: Love what you do. Otherwise, when you fumble and stumble, or when you hit that low point, you're going to hate your business-and your life. "It's incredibly competitive," says Pelletier, thinking of the university level of sports. "It's as competitive off the field, to do a sports business, as it is on the field, playing the game. It's a big business, and it can be easy to get disillusioned with the business side of sports." But if you love what you do, you're less likely to be disillusioned. Arthur Susskind, 32, owns Soccer Sticks, a Long Island store that specializes in soccer and lacrosse merchandise. His store now brings in about $200,000 per year, although he says "the first two years were tough." Like many entrepreneurs, he's lost none of his enthusiasm, and he knows that he's building what he believes is going to be one heck of a game plan.
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"Lacrosse is growing leaps and bounds throughout the country," says Susskind, and the numbers appear to back him up. According to the national organization US Lacrosse, youth membership (age 15 and under) has doubled since 1999 to more than 60,000, and sporting articles are often referring to lacrosse as one of the fastest-growing sports in the country, along with golf and soccer (a sport Susskind also specializes in). During the past 18 months, the business has "grown tremendously," says Susskind, who has one part-time employee and hopes to expand his store or open a second store in the not-too-distant future. "I think it's a great business to go into," he says, noting that his store and industry are almost recession-proof: "Parents are always going to want their kids to play sports."
Geoff Williams is a freelance journalist based in Loveland, Ohio. Maybe it was his binocular-sized glasses or his dweeb-like wardrobe, but as a kid he was almost always picked last to play on teams in gym.
