Starting a community center can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful community center.
Importantly, a critical step in starting a community center is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start a Community Center:
- Choose the Name for Your Community Center
- Develop Your Community Center Plan
- Choose the Legal Structure for Your Community Center
- Secure Startup Funding for Your Community Center (If Needed)
- Secure a Location for Your Business
- Register Your Community Center with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Community Center
- Buy or Lease the Right Community Center Equipment
- Develop Your Community Center Marketing Materials
- Purchase and Setup the Software Needed to Run Your Community Center
- Open for Business
1. Choose the Name for Your Community Center
The first step to starting a community center is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your new community center:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your community center.
2. Develop Your Community Center Plan
One of the most important steps in starting a community center is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to private or public funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your community center.
- Company Overview – this section tells the reader about the history of your community center and what type of community center you operate. For example, are you a recreational, senior citizen, multicultural, or youth community center?
- Industry Analysis – here you will document key information about the community center industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing services like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your community center? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your community center make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
3. Choose the Legal Structure for Your Community Center
Next you need to choose a legal structure for your community center and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the owner of the community center and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
2) Partnerships
A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a community center together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a community center include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a community center is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your community center, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
4. Secure Startup Funding for Your Community Center (If Needed)
In developing your community center plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a community center to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a community center that they believe has high potential for growth.
There are also several grants to start a community center.
5. Secure a Location for Your Business
The best way to find a location for your community center is to evaluate your needs and find a spot that meets those requirements. Consider things like the amount of space you’ll need, the accessibility of the location, and what kind of facilities are available. You can also look for locations that are central to your community or have an existing organization nearby.
Once you’ve identified some possible locations, it’s important to visit the site and take a closer look at the space. This will help you determine if the location is right for your needs. You’ll also want to talk to the property owner or manager to get an idea of what the terms and conditions would be for using the space.
6. Register Your Community Center with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a bank account in your community center’ name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your community center to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
You will need to obtain a business license and a zoning permit to start a community center. You may also need to obtain other permits, depending on the nature of your business. For more information, contact your local licensing authority or zoning board.
10. Get Business Insurance for Your Community Center
There are multiple types of insurance you’ll need to run a community center.
Some business insurance policies you should consider for your community center include:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Auto insurance: If a vehicle is used in your business, this type of insurance will cover if a vehicle is damaged or stolen.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
- Professional liability insurance: This protects your business against claims of professional negligence.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Community Center Equipment
The necessary equipment for a community center can vary greatly depending on the size and purpose of the center. However, some essentials include tables and chairs, a sound system, a stage, and possibly kitchen facilities.
12. Develop Your Community Center Marketing Materials
Marketing materials will be required to attract and retain customers to your community center.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your community center. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional community center website provides potential customers with information about the services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your community center.
13. Purchase and Setup the Software Needed to Run Your Community Center
To run a community center, you’ll need some essential software. First, you may want to use a content management system (CMS) such as WordPress to create a website for your center. These systems typically include features such as user registration, forums, and blogs that will help people in the community stay informed on the programs available and get the most out of your center. Additionally, you may want to invest in some accounting software to manage the center’s finances and budget.
14. Open for Business
You are now ready to open your community center. If you followed the steps above, you should be in a great position to build a successful business and know everything you need about how to start a recreation center. Below are answers to frequently asked questions that might further help you.
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How to Start a Community Center FAQs
Is it hard to start a community center?
It can be hard to start a community center, but it can also be quite rewarding. There are a few things you can do to increase your chances of success:
- Start by researching the different types of community centers and the needs of the local community.
- Make sure your community center location is accessible and welcoming to everyone.
- Develop a clear vision for what you want your community center to achieve.
- Raise funds and get support from local government agencies or other organizations.
- Hire qualified staff and volunteers.
- Promote your community center and get people involved.
How can I start a community center with no experience?
There are many ways to start a community center with no experience. One option is to look into community or religious programs that are already in place and see if there is a way to join or partner with them. You can also check out a non-profit organization in your local community. Another option is to reach out to your local government or Chamber of Commerce and see if there are any grants or funding opportunities available for community center start-ups. Finally, reach out to local businesses and civic organizations to see if they would be interested in partnering with you on your community center project. No matter which route you choose, the most important thing is to get started and to keep moving forward.
What type of community center is most profitable?
There is no definitive answer to this question as it depends on a variety of factors, such as the location of the community center and the type of services offered. However, some centers are more profitable than others. For example, a community center that offers child care services can be quite profitable. Additionally, a community center that is located in a high-traffic area is more likely to be profitable than one that is not.
How much does it cost to start a community center?
Starting a community center typically costs between $50,000 and $100,000. However, the cost can vary greatly depending on the size and location of the center, as well as the type of programs offered.
What are the ongoing expenses for a community center?
Some common ongoing expenses for a community center can include rent or mortgage payments, utility bills, necessary repairs and maintenance, staff salaries, and programming costs.
How does a community center make money?
A community center can make money in a few ways: through memberships, donations, fundraising events, and grants. Some community centers also offer classes or rent out space for events.
Is owning a community center profitable?
There are a few reasons owning a community center can be profitable. Community centers can offer classes and workshops that will bring in new customers. Another reason is that community centers can be used as event venues, which can bring in rental income. Finally, community centers can offer space for businesses to operate, which can bring in additional revenue.
Why do community centers fail?
Most community centers fail because they do not generate enough revenue to sustain themselves. Typically, a community center will have to charge membership fees to maintain operations. However, if the community center is not able to attract enough community members, it will eventually have to close. Additionally, many community centers rely on government funding, which can be unreliable. If the government decides to cut funding for a community center, it may have to close its doors. Finally, poor management can lead to the failure of a community center. If the staff is not properly trained or if the center is not run efficiently, it will likely fail.
