TSL #014: How to Launch a Sports Business That Thrives: The 4V Framework
As someone who has spent the past 15 years building and operating Ultimate Hoops, Inc. as a successful national brand across North America, I know a little about what it takes to succeed in the recreational sports industry.
I've learned from my mistakes and experiences, so I was inspired to start my sports consulting agency- to share my insights and help other entrepreneurs looking to launch their own sports businesses.
When I work with new clients, they ask how I started Ultimate Hoops. I recently went in-depth on the experience of launching Ultimate Hoops in a podcast, and now I want to provide a practical application of my experience into a business strategy tool- the 4V Framework - for others to launch their own business.
I didn't have a clear framework or business plan when I started Ultimate Hoops, but I followed my vision at full speed, sometimes smashing aimlessly into walls. Thankfully, the vision for Ultimate Hoops was compelling enough to carry the business through all those early mistakes.
After years of experience in the industry, the 4V Framework provides a simple process to avoid costly mistakes. The 4V Framework, Viability, Vision, Validation, and Volume, is a comprehensive guide to help you create a business that thrives from the start.
If I had applied the 4V Framework to Ultimate Hoops before we started, we would have grown twice as fast and saved thousands of dollars by being more efficient. So, let me break down the four components of the 4V Framework that should be applied to every sports startup.
VIABILITY
Viability is the first component of the 4V framework. So before spending time and money on creating an Inc. or LLC, or a cool business logo, ensure your business can be viable in your target market.
For example, is a sports facility available to rent to host your services? What are their rental rates, terms, and conditions?
You should visit your competitors' businesses and observe their customer experiences to gain insights into what works and what doesn't. This research will help you understand what your target market is looking for in a recreational sports business, and you can use this information to refine your business concept.
It's also crucial to evaluate the financial viability of your business. Calculate the costs of starting and operating your business, including equipment, staff, rent, and marketing expenses. Then, determine how much revenue you'll need to generate to break even and profit.
VISION
The second component is Vision. Having a clear vision is what sets successful businesses apart from the rest. This is why gathering a thorough analysis of your competitors in the viability phase is essential to inform how your business and experiences will stand out from the competition.
One of my favorite business quotes related to the importance of vision comes from one of my business mentors Tom Redmond, founder of Aussie Shampoo, the largest shampoo brand in the U.S. with annual revenues of $114 billion.
Tom always reminded me, “Alan, in business, if you’re not different, you’re dead.”
These words played on a loop while creating the Ultimate Hoops League night experience. How would we be different from every other recreational league in the world? Out of that exercise came our vision- to treat every basketball player, regardless of age or skill level, like a professional.
Your business doesn’t need to have as ambitious of a vision, but it does need to be grand enough to separate you from the competition in your market and benefit your target audience. In addition, a strong vision will provide leverage in your pricing strategy and guide your marketing and branding strategies.
VALIDATION
The third component of the 4V framework is Validation. Now that your vision is locked in, you need to validate two things:
Can a sound operational and financial plan realize and execute the vision?
Is there market demand to justify further investment in marketing to grow the business?
Ensure your experience is not so ambitious that its operational costs put you out of business. For example, would I have loved to have Ultimate Hoops games played in every NBA arena across the country when we started?
Of course, however, the rental agreements with NBA teams would have crushed our profit margins, and the scheduling of games would have been a logistical nightmare.
Always ensure your operations can deliver your vision or consumer trust will slip through your fingers.
This means testing and validating your products, services, and strategies to ensure they are practical and successful. Use market research, customer feedback, and data analysis to ensure your products and services meet your target audience's needs and achieve your brand promise.
When this is achieved, it’s time to move on to the final phase of the 4V startup framework.
VOLUME
Volume is all about driving sales and growing revenue once consumers have validated your business. This was a critical area of focus for us once Life Time, Inc acquired Ultimate Hoops. As a result, we spent a lot of time developing effective marketing strategies and building a strong sales team.
We also focused on providing personalized customer service to satisfy our clients and generate referrals. In addition, exploring new revenue streams through ancillary events, like our National Tournaments in Las Vegas and New York City, and merchandise sales was another way we expanded our business and increased profitability.
The 4V Framework will help you start and achieve long-term growth and success in the recreational sports industry. But remember that every business has its unique challenges. If you'd like to discuss using the 4V Framework in your business plan precisely, let's connect.
