How to Build an Indoor Playground or Play Café That's Actually Worth Buying

 

What determines the value of your play café, why profitable businesses aren't always easy to sell, and how to prepare for an eventual exit—even if selling isn't part of your current plans.

If you decided to sell your indoor playground or play café tomorrow, how much do you think someone would be willing to pay for it?

Would you start with the amount you invested in your buildout, playground equipment, furniture, and café? Would you look at your annual revenue and apply a multiple you've heard other business owners mention? Or would you simply come up with a number that feels reasonable based on the years of work you've invested in building your business?

I think this is one of the most misunderstood aspects of owning a small business, particularly in the indoor playground industry, where startup costs can be substantial and owners often invest an enormous amount of their own time, money, and energy into creating their spaces.

It's also something I have personal experience with.

After five years of owning and operating my own indoor playground business, I sold my locations. And while I had spent years building the business, developing systems, growing our customer base, and establishing a recognizable brand, the process of preparing for a sale was much more involved than I initially anticipated.

There were financial records to organize, operational processes to document, questions to answer, and a tremendous amount of information to prepare for potential buyers. I also had to think about the business from an entirely different perspective.

As an owner, you tend to evaluate your business based on everything you've put into it and everything you've accomplished. A potential buyer, however, is evaluating what they're going to get out of it.

That distinction is incredibly important.

It's also why I wanted to have a conversation with Gary Aldridge, who has spent more than 30 years helping business owners measure, grow, and realize the value of their businesses.

Gary is the owner of Aldridge Valuation Advisors and holds credentials including CPA, MBA, and Certified Valuation Analyst. During our conversation on The Profitable Play Podcast, we explored how small businesses are actually valued, why owners frequently overestimate what their businesses are worth, and what potential buyers look for when evaluating an acquisition.

We also discussed several issues that are particularly relevant to indoor playground and play café owners, including membership revenue, future birthday party bookings, owner dependence, financial reporting, unpaid owner labor, and the importance of building a business that can continue operating successfully after the original owner leaves.

What I found most valuable about this conversation is that nearly everything Gary recommends for preparing a business for sale is also something I would recommend to owners who want to build a more profitable, sustainable business today.

You don't need to have an exit strategy mapped out for the next five years to benefit from understanding what makes your business valuable.

In fact, I would argue that the best time to start thinking about these things is long before you're ready to sell.

1. Your play café is not necessarily worth what you invested in it

One of the first misconceptions I wanted Gary to address was the relationship between startup investment and business value.

This comes up frequently in my work with prospective indoor playground owners because opening a play café can require a significant upfront investment.

Between commercial playground equipment, construction, flooring, furnishings, café equipment, technology, professional services, and working capital, owners can easily invest hundreds of thousands of dollars before opening their doors.

Naturally, many assume that if they invest $300,000 into opening their business, the business should be worth at least $300,000 when they eventually decide to sell.

Unfortunately, that's not how business valuations work.

Gary explained that while physical assets certainly have value, what a buyer is primarily purchasing is the future economic benefit the business is expected to generate.

In other words, the value of your business isn't determined simply by what you spent creating it. It's determined largely by what the business can produce financially and how confident a buyer can be that those results will continue.

Consider two hypothetical indoor playgrounds.

Both owners invested $350,000 to open their businesses. Both spaces have comparable playground equipment, attractive interiors, and similar square footage.

The first business generates $650,000 in annual revenue but struggles with high labor costs, inconsistent birthday party bookings, and very little operating profit.

The second generates $650,000 in annual revenue as well, but has better expense controls, strong membership retention, consistent birthday party demand, and significantly healthier cash flow.

Although the initial investments and annual revenues are identical, these businesses aren't equally valuable.

A buyer evaluating the second business has evidence that the operation can generate stronger financial returns. The first business may have valuable equipment and an attractive facility, but those assets aren't producing the same economic benefit.

And that difference matters enormously when determining what someone is willing to pay.

Why playground equipment doesn't retain its original value

This is also an important consideration for owners who assume that their equipment will retain most of its original purchase price.

A commercial playground installation might have cost $150,000 or more, but that doesn't mean a buyer would pay $150,000 for the equipment several years later.

The buyer has to consider the equipment's age, condition, remaining useful life, removal and relocation costs, and whether it can be reused in another space.

Some equipment may have a limited secondary market, particularly if it was custom-designed for a specific building.

However, if that same equipment is part of a thriving business with strong customer demand and reliable profitability, it contributes to the value of the business as an operating enterprise.

This is the distinction between selling a collection of assets and selling a functioning business.

When you sell an operating indoor playground, you're potentially transferring much more than the physical components of the space. You're transferring an established customer base, existing revenue, business systems, trained employees, brand recognition, and the opportunity for a new owner to continue generating income without starting from scratch.

Those benefits can be worth substantially more than the equipment itself.

But only if the business can demonstrate that they're producing real economic value.

2. How are indoor playgrounds and play cafés actually valued?

Gary explained that business valuation professionals generally consider three approaches when determining what a business is worth.

Understanding these approaches can help owners avoid relying on overly simplistic formulas or assumptions about their business's value.

The income approach

The income approach evaluates the financial benefits a business is expected to generate in the future.

Gary described how a valuation professional can examine historical financial performance, develop projections for future earnings or cash flow, and account for the risks associated with receiving those future returns.

This approach is particularly relevant for profitable indoor playgrounds because a buyer is purchasing the opportunity to generate income from an established operation.

For example, a business with several years of consistent profitability, growing membership revenue, and reliable birthday party bookings may be easier to evaluate than a business with unpredictable revenue and significant fluctuations in profitability.

The more confidence a buyer has in future financial performance, the more attractive the business may become.

The asset approach

The asset approach focuses on the value of the assets and liabilities associated with the business.

For an indoor playground, this might include playground equipment, furniture, café equipment, inventory, and other business assets, along with any relevant debts or obligations.

Gary explained that this approach can become particularly important when the underlying assets are worth more than the income the business is generating.

Imagine an indoor playground that has experienced several years of declining revenue and is no longer profitable. A buyer may not be willing to pay a premium for its operating history because that history doesn't demonstrate a reliable ability to generate future income.

In that situation, the value of the equipment and other assets may become a more significant consideration.

It's also important to distinguish between the value of an operating business and the amount an owner might recover through liquidation. Selling equipment individually, particularly under time pressure, may produce substantially less than the value of those assets in continued productive use.

The market approach

The market approach looks at comparable business transactions to help estimate value.

For example, a valuation professional might examine what similar family entertainment businesses, indoor playgrounds, or other comparable operations have sold for.

However, Gary cautioned that comparable transactions are guidelines rather than guarantees.

A business's location, size, profitability, lease terms, operating structure, and customer base can all affect how relevant a particular comparison is.

This is especially important in our industry because indoor playgrounds can have dramatically different business models.

A 2,000-square-foot play café generating revenue primarily through open play and coffee sales isn't necessarily comparable to a 20,000-square-foot family entertainment facility with attractions, food service, private events, and multiple revenue streams.

Even two businesses with similar annual revenue can have very different valuations if their profitability, risk, and operating requirements differ.

The takeaway is that there is no universal revenue multiple that accurately determines what every indoor playground is worth.

If someone tells you that all play cafés sell for a certain percentage of revenue or a fixed multiple of earnings, that should be treated as a starting point for further investigation, not a reliable valuation.

3. Why business owners often overestimate what their businesses are worth

One of the more eye-opening parts of our conversation was Gary's discussion of what he calls the value gap.

This is the difference between what a business owner believes their business is worth and what a buyer is actually willing to pay.

Gary emphasized that this disconnect can become a major obstacle to completing a sale.

He cited an estimate that approximately 70% of businesses never sell, using it to illustrate how often owners struggle to find buyers willing to meet their expectations. That figure should be treated as an estimate he referenced during the interview, rather than a verified rate specific to indoor playgrounds.

But regardless of the exact percentage, the underlying problem is important.

Owners often assign value to things that buyers don't necessarily value in the same way.

You might remember the months you spent planning your business, the personal sacrifices you made to get it open, the late nights spent solving staffing problems, and the years you invested in building customer relationships.

Those experiences are meaningful, and they may have contributed to the success of the business.

But a buyer isn't purchasing your personal history.

They're evaluating whether acquiring the business makes financial sense.

The question every seller should be prepared to answer

Gary shared an example of a business owner who insisted he wouldn't sell his company for less than $5 million.

Gary's response was to ask what a buyer would actually receive in exchange for that money.

The business was heavily dependent on the owner, who was personally responsible for generating much of its revenue. If he left, there was a substantial risk that employees and customers would leave with him.

From a buyer's perspective, that creates a difficult proposition.

Why pay millions of dollars for a business whose value might disappear when the owner exits?

This example illustrates something I think every play café owner should consider.

If a buyer could open a comparable indoor playground for $400,000, what would make purchasing your existing business for $600,000 or $800,000 a better investment?

Perhaps you've already established a strong membership base, secured an excellent location, built a highly capable management team, or developed a reputation that would take years for a new competitor to replicate.

Those are compelling advantages.

But if your business has inconsistent revenue, no documented systems, an unfavorable lease, and an owner who handles nearly every important responsibility, a buyer may decide that opening a new location is the more attractive option.

The challenge is to build a business whose existing advantages justify the cost of acquiring it.

4. Predictable revenue makes your indoor playground more valuable

One of the most important themes from my conversation with Gary was the value of predictable revenue.

This is something I talk about frequently because I believe a successful indoor playground business should be designed around much more than individual open play admissions.

While transactional revenue can be profitable, a business that relies entirely on customers deciding to visit on any given day may experience substantial fluctuations.

Weather, school schedules, illness, seasonality, local competition, and changes in consumer spending can all affect attendance.

For an owner, that unpredictability makes staffing, cash flow management, and financial planning more difficult.

For a potential buyer, it also creates uncertainty about future earnings.

Gary explained that predictable revenue reduces risk because it gives buyers greater confidence in what the business is likely to generate after the sale.

And in our industry, there are two particularly important opportunities to create that predictability.

Memberships create recurring revenue

Memberships are one of the clearest examples of recurring revenue in an indoor playground business.

Instead of relying exclusively on customers purchasing individual admissions, a membership program allows families to pay regularly in exchange for ongoing access or benefits.

For example, imagine a play café with 200 active memberships averaging $65 per month.

That represents $13,000 in monthly membership billings, or $156,000 annually if the average membership count and price remain stable.

That doesn't mean the business automatically earns $156,000 in profit. Memberships have associated costs, and the business still needs to account for payment processing, staffing, facility expenses, customer usage, and other operating requirements.

But the recurring nature of that revenue can make financial performance easier to forecast.

A buyer can evaluate historical membership counts, cancellations, pricing, customer retention, and the consistency of monthly collections.

A business with 200 stable memberships and a low cancellation rate may be more attractive than one that frequently fluctuates between 80 and 200 members.

This is why I encourage owners to monitor more than just the total number of active memberships.

You should also understand how many members you're adding each month, how many are canceling, how long members typically remain active, and how membership revenue contributes to overall profitability.

Those metrics help you determine whether your membership program is genuinely creating a stable financial foundation.

Future birthday party bookings create a revenue pipeline

I also asked Gary about birthday party bookings because this is another important source of predictability in our industry.

Many indoor playgrounds book birthday parties weeks or months in advance, often collecting deposits at the time of booking.

Gary described those future bookings as a sales pipeline.

For example, imagine an indoor playground that already has 35 birthday parties booked over the next three months, with an average package value of $600.

That represents $21,000 in anticipated gross party revenue, assuming those parties take place at the expected prices.

A buyer can review those bookings to better understand future demand, although they would also need to evaluate cancellation policies, outstanding balances, deposits, fulfillment costs, and any obligations that transfer with the sale.

Compare that with a business that has almost no future parties booked and depends on last-minute inquiries to fill its calendar.

The first business provides more visibility into future revenue.

This is one reason I encourage owners to maintain organized booking records and track their birthday party pipeline consistently.

At a minimum, you should know how many parties are booked, the average revenue per party, how far in advance customers book, and how much revenue is already committed for upcoming months.

When you're preparing to sell, that information can help demonstrate the strength and consistency of demand.

Even if you're not selling, it gives you a much better understanding of how your business is performing and what you need to do to reach your revenue goals.

5. A business that depends entirely on its owner is harder to sell

This might be the most important lesson in the entire interview, particularly for owner-operated indoor playgrounds.

Gary shared the example of a business owner who was personally responsible for generating revenue, maintaining customer relationships, and keeping the operation running.

The problem wasn't necessarily that the owner was doing a poor job. The problem was that the business depended so heavily on that individual that its future success became uncertain once they were removed from the equation.

And I see versions of this all the time in our industry.

An owner might be responsible for scheduling every employee, managing birthday party inquiries, ordering inventory, creating the marketing content, responding to customer complaints, processing payroll, and covering shifts when someone calls in sick.

They might know every regular customer by name and have personally developed relationships with every local school, daycare, and community organization that refers business to the space.

From the owner's perspective, that level of involvement can feel like dedication.

But from a potential buyer's perspective, it raises an important question: What happens when this person leaves?

If the owner is the only person who knows how to operate the business effectively, the buyer isn't simply purchasing a profitable indoor playground. They're purchasing a business that may require them to replace the previous owner's labor, knowledge, and relationships immediately.

That creates additional risk and expense.

The difference between owning a business and being its most important employee

I frequently encourage play café owners to think about whether they've built a business that can operate independently or simply created a demanding job for themselves.

This doesn't mean owners shouldn't be involved in their businesses. Many genuinely enjoy working in their spaces, interacting with customers, and participating in daily operations.

But there should be a distinction between choosing to be involved and being required to be involved.

Imagine two indoor playgrounds generating similar revenue and operating profits.

At the first location, the owner works 55 hours per week, manages every employee, handles all customer communication, and personally coordinates birthday parties. If the owner takes a vacation, the business struggles to function normally.

At the second location, the owner has established a capable management structure, documented operating procedures, and clear expectations for employees. The owner still provides leadership and oversight but isn't required to be physically present for every decision.

Assuming the financial results are otherwise comparable, the second business is likely to offer a buyer a much smoother transition.

The buyer can evaluate the existing management structure, understand how daily operations are handled, and assess whether the business can continue performing without the original owner.

The first business may still be sellable, but the buyer has to account for the additional labor and management resources required to replace the owner.

How to reduce owner dependence

Gary emphasized the importance of delegating responsibilities and building systems well before you're ready to sell.

For indoor playground owners, I would begin by identifying the tasks that currently require your direct involvement and determining which could be performed by a trained employee or manager.

Some of the most important areas to address include employee scheduling, birthday party coordination, customer service, inventory management, opening and closing procedures, financial reporting, and day-to-day operational decisions.

This is where standard operating procedures become incredibly valuable.

A written procedure for hosting birthday parties, for example, should explain how staff prepare the room, welcome the family, manage the party timeline, handle food and beverage service, address common problems, and complete cleanup.

If those expectations exist only in the owner's head, the business depends on the owner's knowledge.

If they're documented, employees can be trained to deliver a consistent experience without requiring the owner to supervise every detail.

I would also encourage owners to establish clear performance expectations for their managers and employees.

A general manager shouldn't need to call the owner every time a customer requests a refund or an employee needs a schedule adjustment. There should be established policies, decision-making authority, and clear guidelines for when something genuinely requires the owner's involvement.

These systems don't simply make a business more attractive to potential buyers. They can also improve consistency, reduce operational mistakes, and give the owner more time to focus on higher-value responsibilities.

6. Understand EBITDA and what your business is actually earning

Another major topic Gary emphasized was the importance of understanding your financial performance.

And this is where I think a lot of indoor playground owners have work to do.

Many owners monitor revenue closely but don't have the same level of familiarity with their operating expenses, profitability, or cash flow.

They know how much money came through their point-of-sale system last month, how many birthday parties they hosted, and whether their bank balance increased or decreased.

But those numbers don't necessarily tell you how profitable your business actually is.

Gary discussed EBITDA, which stands for earnings before interest, taxes, depreciation, and amortization.

EBITDA is one measure used to evaluate a company's operating earnings before certain financing, tax, and accounting expenses.

For a small business, it can help a buyer understand the underlying earnings generated by the operation, although it isn't the same as net income or cash flow.

A simplified EBITDA example

Let's imagine an indoor playground generates $750,000 in annual revenue.

Its financial statements show the following hypothetical results:

In this simplified example, the business generates $115,000 in EBITDA before accounting for depreciation and amortization.

However, that doesn't mean the owner has $115,000 available to take home.

The business may still have interest expenses, taxes, loan principal payments, equipment replacement needs, and other cash requirements.

This distinction is particularly important for indoor playgrounds because playground equipment and facilities require ongoing maintenance and eventual reinvestment.

A buyer needs to understand not only the business's operating earnings but also how much cash will realistically be available after maintaining the assets and fulfilling financial obligations.

What is normalized EBITDA?

Gary also discussed the concept of normalizing earnings.

Normalized EBITDA attempts to adjust reported earnings to better reflect the business's ongoing economic performance.

For example, a business may have incurred an unusual, one-time expense that isn't expected to recur. Depending on the circumstances, a valuation professional might consider adjusting for that expense when evaluating sustainable earnings.

Similarly, a business might have expenses that are unusually high or low because of the owner's personal decisions or involvement.

The purpose of normalization isn't to make the financial statements look as attractive as possible. It's to help a buyer understand what the business is reasonably expected to earn under an appropriate operating structure.

And that brings us to one of the most important questions I asked Gary.

7. What happens if the owner isn't paying themselves?

This question actually came from an owner in my community, and I was particularly interested in Gary's answer because it's such a common situation in our industry.

Many play café owners work full-time in their businesses without paying themselves a consistent salary.

Some take occasional distributions when cash flow allows. Others reinvest nearly everything back into the business, especially during the first few years.

And some owners perform responsibilities that would otherwise require multiple paid employees.

At first glance, this can make the business appear more profitable because labor expenses are lower than they would be if the owner were paying someone else to perform those duties.

But Gary explained that a potential buyer will typically account for the cost of replacing that unpaid labor.

An example of how unpaid owner labor affects valuation

Imagine your play café generates $100,000 in annual EBITDA, but you personally work 50 hours per week managing the business and don't pay yourself a salary.

A buyer reviewing your financial statements might initially see $100,000 in operating earnings.

However, if the buyer doesn't intend to perform your responsibilities personally, they'll need to hire someone to replace you.

Suppose the appropriate annual compensation for that role is $65,000, including the relevant employer costs.

If that cost isn't already reflected in the financial statements, the buyer may adjust the business's earnings downward to account for it.

In this simplified example, the $100,000 in reported EBITDA could become approximately $35,000 in normalized EBITDA after accounting for the replacement labor.

That is a substantial difference.

And it can significantly affect what a buyer is willing to pay.

The exact treatment depends on the valuation method, the buyer's plans, and whether the owner is already receiving compensation or performing duties that require replacement. Some small business transactions also use seller's discretionary earnings rather than EBITDA, so it's important not to assume that every buyer will calculate value in exactly the same way.

But Gary's underlying point is extremely important: A business isn't necessarily as profitable as it appears if its financial performance depends on substantial amounts of unpaid labor.

This is one of the reasons I encourage owners to include realistic management compensation in their financial projections, even if they don't intend to pay themselves that amount immediately.

You need to understand whether your business model can support the labor required to operate without relying on your personal availability indefinitely.

And if you're planning to sell, that becomes even more important.

8. Clean financial records are essential when selling an indoor playground

During our conversation, Gary repeatedly returned to the importance of accurate financial reporting.

This is another area where owners can unintentionally create problems long before they decide to sell.

If your bookkeeping is inconsistent, expenses are miscategorized, business and personal transactions are mixed together, or your financial statements don't accurately reflect the operation, it becomes much harder for a potential buyer to evaluate your business.

A buyer needs confidence that the financial information they're reviewing is reliable.

They want to understand how the business has performed historically, what expenses are required to operate it, and whether the reported earnings can reasonably continue.

If you can't provide that information, the buyer may become more cautious, request additional documentation, negotiate a lower price, or decide not to proceed.

What financial information should you be tracking?

At a minimum, I recommend that indoor playground owners maintain accurate monthly financial statements, including a profit and loss statement and balance sheet, along with cash flow information.

You should also be able to separate revenue by major category, including open play, birthday parties, memberships, café sales, retail, classes, and other significant revenue streams.

This is important because different revenue streams can have very different profitability and operating requirements.

For example, a play café generating $100,000 in café revenue may appear to have a strong food and beverage operation, but the actual contribution to profit depends on ingredient costs, labor, waste, and other expenses.

Similarly, birthday parties might generate substantial revenue while requiring more staffing, supplies, and preparation time than the owner initially realizes.

Without accurate financial reporting, you can't reliably evaluate those differences.

I also encourage owners to maintain a rolling 12-month view of their financial performance.

Gary discussed the importance of looking beyond a single month or isolated reporting period to understand the business's earnings over time.

For a seasonal industry like ours, this is particularly valuable.

Comparing July to January may not provide meaningful insight because customer demand can vary significantly throughout the year. Looking at the trailing 12 months, along with year-over-year comparisons, can provide a more complete picture of the business's financial trajectory.

And if you're eventually preparing for a sale, several years of organized financial records will make the process substantially easier.

9. Selling your business when you're desperate puts you at a disadvantage

One of the most interesting concepts Gary discussed was leverage.

He described leverage in a business sale as having two important components: time and money.

If your business is generating healthy cash flow and you aren't under immediate pressure to sell, you have the ability to evaluate offers carefully and wait for an opportunity that makes financial sense.

But if your business is running out of cash, struggling to pay its obligations, or facing an urgent deadline, your options become much more limited.

Gary shared examples of businesses that had invested heavily in assets and generated substantial revenue but ultimately struggled because they weren't producing enough cash flow.

When an owner needs to sell quickly to avoid closing, a buyer may have considerably more negotiating power.

This is particularly relevant to indoor playgrounds because our businesses often have significant fixed costs.

Rent, payroll, insurance, utilities, equipment financing, and other expenses continue regardless of whether customer traffic meets expectations.

A business can generate impressive revenue and still experience serious cash flow problems if its operating expenses are too high.

And if the owner waits until the business is in financial distress to explore selling, they may find that their options are far less attractive than they anticipated.

Why profitability creates options

One of the reasons I emphasize profitability so heavily is that it creates flexibility.

A profitable business can provide its owner with choices.

You might decide to hire a manager and reduce your involvement, expand into another location, bring in a business partner, or eventually sell the business.

You may also decide to continue owning it because the financial returns are worth the investment.

When the business is struggling financially, those choices become more limited.

This is why Gary encouraged owners to begin preparing well before they have an immediate reason to sell.

The stronger your financial position, the more control you're likely to have over the timing and terms of a potential transaction.

10. Selling your play café doesn't have to mean selling everything

Another topic I wanted to explore was whether owners can sell only a portion of their businesses.

This is particularly relevant as more indoor playground owners expand into multiple locations or develop additional revenue streams.

Gary explained that business owners may have opportunities to bring in an equity partner, sell a portion of their ownership, or sell certain business units while retaining others.

For example, imagine you own three indoor playground locations.

Two are performing exceptionally well, but the third requires significant attention and isn't aligned with your long-term goals.

Rather than selling the entire company, you might explore selling the third location to another operator.

Alternatively, you might bring in an investor to help finance expansion while retaining an ownership interest.

These transactions can be considerably more complicated than a straightforward sale, particularly when locations share employees, systems, intellectual property, or financial obligations.

But the broader lesson is that owners should understand the options available to them.

A full sale isn't necessarily the only way to realize value from the business you've built.

Special considerations for franchise owners

I also asked Gary about selling franchised businesses because this is becoming increasingly relevant in the indoor playground industry.

He explained that franchise agreements can contain restrictions that affect the sale process.

For example, a franchise agreement might require approval of the buyer, limit who can purchase the business, or establish specific transfer procedures.

Those restrictions can reduce the pool of potential buyers or introduce additional steps into the transaction.

This doesn't necessarily mean a franchised indoor playground is worth less than an independent business. A strong franchise brand, established operating systems, and ongoing support can also provide meaningful value.

However, franchise owners should understand their contractual obligations well before beginning the sale process.

If you're considering purchasing a franchise, I would also encourage you to review the transfer and resale provisions before signing the agreement, rather than assuming you'll have complete flexibility when you're ready to exit.

11. Should you hire a business broker or sell your indoor playground yourself?

When I sold my own indoor playground business, I learned just how much work can go into preparing for a transaction, answering questions, and navigating the process.

So I wanted to ask Gary about the role of professional advisors and whether owners should consider selling their businesses independently.

There are certainly platforms where owners can list businesses for sale, including BizBuySell. Some owners also find buyers through personal relationships, local business networks, or direct inquiries from other operators.

But finding someone interested in purchasing your business is only one part of the process.

Gary emphasized the importance of having qualified advisors who understand business valuation, legal agreements, taxes, and the transaction process.

And he made an important point about specialization.

Not every accountant specializes in business valuation, and not every attorney specializes in business acquisitions.

A professional who handles your routine bookkeeping or business taxes may be excellent at that work without necessarily having extensive experience structuring a business sale.

Depending on the size and complexity of your transaction, you may need assistance from a business valuation professional, business broker, transaction attorney, or tax advisor.

Understand what a broker is incentivized to do

Gary also discussed an important consideration when hiring a business broker.

Many brokers are compensated through commissions based on completed transactions. That creates an incentive to get deals closed.

While this doesn't mean brokers are acting against their clients' interests, it reinforces the importance of understanding your business's value independently.

If you don't have a realistic understanding of what your business is worth, you may struggle to evaluate whether an offer represents a reasonable outcome.

I would also encourage owners to understand the fees associated with a transaction before making decisions.

Broker commissions, legal expenses, accounting fees, taxes, and outstanding debt can all affect how much money you ultimately receive.

And as Gary explained later in our conversation, the amount you take home can be far more important than the headline sale price.

12. Prepare for due diligence long before you're ready to sell

One of the more practical parts of our conversation involved the due diligence process.

Due diligence is the period when a potential buyer reviews information about the business to verify its financial performance, operational condition, contractual obligations, and other relevant details.

For indoor playgrounds, this process can involve much more than simply reviewing a profit and loss statement.

A buyer may want to examine your lease, equipment condition, maintenance records, employee information, membership obligations, future birthday party bookings, vendor contracts, insurance coverage, and other aspects of the operation.

They may also want to understand the procedures used to operate the business and whether those procedures can be transferred to a new owner.

Gary explained that the due diligence process can be frustrating for sellers, particularly those who are accustomed to making decisions quickly and independently.

Once a potential buyer becomes involved, the seller no longer controls every aspect of the timeline.

The buyer may need financing approval, legal review, additional financial documentation, or time to evaluate the information provided.

That can create periods of uncertainty, even when both parties are genuinely interested in completing the transaction.

Build a sale-readiness file now

One recommendation I would make to owners is to begin organizing important business information long before they have an interested buyer.

That doesn't mean you need to create a formal sales package today. But you should be able to locate the information someone would need to understand and evaluate your business.

This list isn't exhaustive, and the documentation required will vary depending on the transaction. However, maintaining organized records can make a future sale considerably easier.

It also makes your business easier to manage today.

If you can't quickly locate your equipment records, explain your membership obligations, or produce accurate financial reports, those are operational weaknesses worth addressing regardless of whether you're planning to sell.

13. The sale price isn't necessarily what you'll take home

Another important point Gary made was that owners should focus on the net proceeds they expect to receive from selling their businesses.

It's easy to become fixated on a particular sale price.

You might decide that you'd be happy selling your indoor playground for $500,000 or that you wouldn't consider an offer below $750,000.

But those numbers don't necessarily reflect the amount of money you'll have available after the transaction.

Depending on the sale structure, you may need to account for outstanding debt, professional fees, taxes, working capital adjustments, and other contractual obligations.

Consider a simplified hypothetical example.

In this example, the owner has $360,000 remaining before accounting for taxes and any other transaction-specific adjustments.

The actual amount could differ substantially depending on how the sale is structured.

This is why Gary emphasized setting a goal based on what you want to take home, rather than focusing exclusively on the purchase price.

For owners who have invested years into building their businesses, that distinction can have a major impact on their financial plans.

Why the structure of the sale matters

Not every business sale involves a buyer paying the entire purchase price in cash at closing.

Some transactions involve seller financing, where the buyer pays a portion of the purchase price over time.

Others may include an earnout, where a portion of the seller's compensation depends on the business meeting certain performance targets after the sale.

Gary discussed how these arrangements can create additional challenges for owners who are accustomed to having complete control over their businesses.

An earnout may require the seller to remain involved in the business for a period of time, potentially reporting to the new owner and operating under different expectations.

That can be a significant adjustment.

And it's another reason to understand the full terms of a transaction rather than evaluating an offer solely based on its headline price.

A higher offer with uncertain future payments may not necessarily be more attractive than a lower offer with more favorable payment terms.

The right decision depends on the seller's financial goals, risk tolerance, and circumstances.

14. Start preparing to sell before you think you're ready

One of the most important questions I asked Gary was when owners should begin thinking about their exit strategy.

His answer was straightforward: start now.

He explained that improving a business's value takes time.

Building a reliable management team, strengthening profitability, establishing systems, and developing predictable revenue aren't changes that typically happen overnight.

If you wait until you're exhausted, financially struggling, or facing a major personal change to begin preparing for a sale, you may have far fewer options.

Gary shared examples of business owners who delayed selling, only to see their financial performance decline before they were ready to move forward.

He also described an owner who approached the process with a specific financial goal and timeline, allowing the business to be prepared more intentionally.

I think this is an especially important lesson for indoor playground owners because the industry has its own business lifecycle.

Many spaces experience tremendous excitement leading up to opening, followed by a surge of customer interest during the first several weeks or months.

Eventually, that initial excitement begins to normalize, and the business has to rely on its ability to retain customers, generate repeat visits, sell memberships, book birthday parties, and maintain a strong reputation.

The owners who continue improving their businesses through that normalization period are often better positioned for long-term success.

But the owners who become complacent after a successful opening may find themselves dealing with declining revenue, increased competition, and operational challenges that become harder to address over time.

What I would focus on during the next 12 months

If you're an established play café owner and want to strengthen your business's long-term value, I would prioritize several areas.

First, make sure you understand your true profitability. Review your financial statements, identify your most profitable revenue streams, and evaluate whether your current operating model can support appropriate management compensation.

Second, strengthen predictable revenue. That may involve improving membership retention, increasing advance birthday party bookings, or developing other reliable sources of customer demand.

Third, reduce unnecessary owner dependence. Identify the responsibilities that currently require your involvement and create a realistic plan to delegate them through better systems, training, and management.

Fourth, improve your financial and operational documentation. A business with organized records is easier to evaluate, easier to manage, and often easier to transfer.

Finally, establish a realistic long-term financial goal. You don't need to know exactly when you'll sell, but you should have some understanding of what you ultimately want your business to provide.

These are valuable priorities even if you decide to own your indoor playground for another 20 years.

15. Selling a business is also an emotional decision

One of the more unexpected parts of our conversation was Gary's discussion of the emotional side of selling a business.

We spend so much time thinking about the financial aspects of an exit that it's easy to overlook how closely our identities can become connected to the businesses we own.

For many indoor playground owners, their business is more than a source of income.

It's something they created from an idea, invested years into building, and became known for within their community.

They're accustomed to making decisions, interacting with customers, leading employees, and being responsible for the business's success.

When that business is sold, those responsibilities and relationships can change very quickly.

Gary discussed how some business owners experience regret or a loss of purpose after selling, particularly when they haven't considered what they want their lives to look like afterward. He cited a high estimate of post-sale regret during the interview, although individual experiences vary and that figure shouldn't be treated as a verified prediction for play café owners.

I think the broader lesson is worth considering.

A successful exit isn't simply about receiving a check.

It's also about understanding why you want to sell and what you hope the sale will allow you to do next.

Perhaps you want more time with your family, greater financial flexibility, the opportunity to pursue another business, or simply a different lifestyle.

Those are all valid reasons.

But I would encourage you to think about them before you begin the process.

Four questions to ask yourself before selling

Gary concluded our conversation by recommending that owners answer four questions:

1. What do you want? Determine the financial outcome you're working toward.

2. When do you want it? Establish a realistic timeline.

3. How are you going to get there? Identify the financial and operational improvements necessary to achieve that goal.

4. Why do you want it? Understand what you want your life to look like after the sale.

I particularly appreciate the final question because it's easy to become so focused on building and growing a business that we don't spend enough time considering what success is supposed to look like personally.

And while the answers may change over time, having a clear direction can help you make better decisions today.

The biggest takeaway: Build a valuable business whether you plan to sell or not

After selling my own indoor playground business, I can tell you that there are things I would have approached differently if I'd been thinking about an eventual exit from the beginning.

And that's one of the reasons I wanted to share this conversation with Gary.

I think too many small business owners view selling as something they'll figure out when the time comes.

They assume that if they build a beautiful space, attract customers, and generate revenue, there will eventually be someone interested in purchasing it.

But the reality is that building a successful business and building a transferable business aren't necessarily the same thing.

A potential buyer wants to understand whether the business can continue generating financial returns without the original owner.

They want to see reliable financial records, predictable revenue, capable employees, established systems, and a business model that can support the costs of operating under new ownership.

And if you think about it, those are the same characteristics that make a business more enjoyable and sustainable for its current owner.

A business with healthy cash flow gives you flexibility. A capable management team gives you time. Predictable revenue makes financial planning easier. Documented systems reduce mistakes and improve consistency.

These are things worth building regardless of whether you ever decide to sell.

I also think it's important to remember that your business should be creating value for you throughout your ownership, not simply at the end.

If you're investing years of your life into operating an indoor playground, you should be building something that provides financial returns, supports your personal goals, and becomes increasingly capable of operating without your constant involvement.

You may ultimately decide to sell that business, pass it along to someone else, bring in a partner, or continue operating it for decades.

But the stronger the business becomes, the more options you'll have.

And ultimately, I think that's what building a truly valuable business is all about.

Listen to the full podcast episode

In this episode of The Profitable Play Podcast, I interview Gary Aldridge of Aldridge Valuation Advisors about what makes a small business valuable, how buyers evaluate potential acquisitions, and what indoor playground owners can do today to prepare for a future sale.

Gary also shares examples from more than 30 years of working with business owners, including common valuation mistakes, the importance of predictable cash flow, and the challenges owners face during negotiations and due diligence.

You can learn more about Gary at Aldridge Valuation Advisors  and explore his book, Build for Sale, at BuildForSale.com .

If you're looking for help building a more profitable, sustainable indoor playground or play café, I also invite you to explore Play Cafe Academy . My programs are designed to help prospective and established owners better understand their numbers, develop strong operating systems, and make more informed decisions about growing their businesses.

Because whether your ultimate goal is to expand, step away from daily operations, or eventually sell, the work you do to build a stronger business today will help create more opportunities for tomorrow.