Start a challenge course by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your challenge course. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a challenge course?
Opening a challenge course business is expensive. From renting or purchasing land to buying and installing equipment, it takes a lot of money to fund this type of startup. Besides the typical business expenses, there are several unique costs associated with running a challenge course company.
One of the biggest expenses necessary for this kind of business land. That is the reason why most large adventure courses are located far from population centers where land is cheaper. But it is important to consider whether choosing an out-of-the-way location to save money is a smart business decision in the long run.
Building the course is also a major expense. Construction includes not only the courses but needs to take into account structures such as locker rooms, catering kitchens, and restrooms. A simple zip line can cost $5,000 or more to design and build. Adding a climbing wall can cost almost $40 a square foot.
Unlike many businesses, a challenge course is potentially dangerous. That means that a well-trained staff is essential. A well-trained staff means higher labor costs. Almost 50% of adventure course managers early more than $20 an hour. Other workers earn much more than minimum wage.
Potential challenge course owners looking for a turnkey solution have several options. More and more companies are now offering consulting, training, building and marketing help for people who want to start a challenge course.
What are the ongoing expenses for a challenge course?
Business owners in this industry have many ongoing costs including labor, maintenance, insurance, rent or mortgage payments and marketing.
Who is the target market?
Organizations are the biggest and best customers for many challenge course businesses. Team building and outings are the bread and butter of many challenge courses companies. Other adventure courses have a selection of programs which interests different types of groups from young kids to older adults.
Currently, many courses located in the rural areas do not have a large number of individuals and couples as customers. This is changing as the popularity of mini-rope courses at malls and amusement parks encourage people to seek out challenge courses.
How does a challenge course make money?
A challenge course company can earn money in several ways. Most businesses in this industry earn money by charging clients to take part in a pre-made package. A growing number challenge courses now offer a customizable curriculum and may even host an overnight outing. Some adventure courses offer birthday parties and other event packages.
An increasingly popular model for earning more revenue is by offering self-guided, pay-to-play, access to the course when a group is not using the course.
How much can you charge customers?
Typically packages for organizations charge one price for up to a certain number of participants. Organizations which bring any additional participants having to pay a set fee per additional guest. Costs for groups can range from $500 for a ten-person half-day course and up. Pay-to-play tickets may sell for anywhere from $5 for a single activity to $100 or more for an all-day pass.
How much profit can a challenge course make?
Many smaller challenge courses earn between $100,000 and $300,000 a year, but larger can make more than $2 million dollars a year in revenue according to the Adventure Park Insider.
How can you make your business more profitable?
There are many add-on services available for challenge course business. Food vending is an important component of a successful business plan. Many challenge course businesses also sell clothing and equipment. Hosting birthday parties and other special is a good source of income.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your challenge course is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Find the right bank for you, read our review of the Top 5 Banks for Your Small Business
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
In most states, it is necessary to obtain a challenge course license. Certain state permits and licenses may be needed to operate a challenge course business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Informed Consent Agreement
It is recommended to provide clients with informed consent agreements to decrease legal liability and encourage transparency.
To avoid liability and potential lawsuits, challenge course businesses should have their clients sign waivers.
In order to play music in a business setting, permission must be acquired from the composer or license holder. Typically, it is possible to obtain a “blanket” license allowing a businesses to play music owned by a large catalog of artists and recording studios. Such licenses can be obtained from Performance Rights Organizations, such as ASCAP or BMI.
Certificate of Occupancy
A challenge business is generally run out of an outdoor location. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a challenge course business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your challenge course business will be in compliance and able to obtain a CO.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a challenge course
Just like every other business today, an Internet presence is essential, but the ideal marketing strategy depends on the target customer. Challenge courses which focus on corporate clients need to invest money and time on contacting companies directly. Speaking with HR managers is a great approach to creating interest in a particular program. Social media promotion is a great way to spread awareness of a pay-to-play course.
How to keep customers coming back
Holding an open house for leaders of organizations to visit the challenge course and experience it first hand is a wonderful way to generate business. Adventure courses which are aimed at individuals and small groups should provide great service and discounts for multiple visits and guests.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Challenge Course In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
Lovers of the outdoors who have experience in military or police training, summer camps, or scouting are uniquely qualified to own and operate a challenge course business. Depending on the type of clients which a business focuses on, a background in psychology, corporate training, or education is helpful. This kind of business needs an owner who is hands on. Owners should be passionate and excited about meeting new people.
What happens during a typical day at a challenge course?
Much of the day-to-day activities of the owner a challenge course centers on marketing. Promotion and sales are important parts of the business. Owners may need to meet with leaders of organizations to sell the programs. Many owners enjoy leading skill courses themselves.
What are some skills and experiences that will help you build a successful challenge course?
It is all about marketing and sales. Whether a challenge course business owner wants to focus on corporate team building, other kinds of groups or the individual pay-to-play marketplace, ultimate success requires knowing how to find potential clients and how to win their business. In addition, the ability to teach skills and to speak publicly is a valuable asset.
What is the growth potential for a challenge course?
According to Adventure Park Insider pay-to-play challenge courses are continuing to increase the popularity of challenge courses. Zip lines, zip line tours, and high ropes are among the most wanted attractions.
TRUiC's YouTube Channel
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a challenge course?
Start small and have a clear business plan. Overbuilding a location, in the beginning, is a common issue for many people who are new to the industry.
It is essential to have a good business plan based on real data, not hunches. It is a smart idea to invest in a professionally written business plan. The cost is low compared to the amount of money it can save in the long run.
How and when to build a team
A team of highly skilled and motivated individuals is critical right from the start when running an adventure course business.