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 Hair-raising expansion leap pays off

 

 In many businesses, there is a point at which any further growth can only take place with a leap so big that it is almost as daunting as starting all over. For Candice Reynolds, that point was the most difficult since her involvement with Outeniqua Action Sports Arena, an indoor sports franchise in the Southern Cape town of George.

The business, which offers the facilities and coordination for social teams to compete in leagues of indoor games, was already thriving when Reynolds took it over ten years ago. But it was severely limited by the fact that they had only one playing surface, or “arena” as it is known in the industry. It was a rented hall which offered space for no more than the 45 teams that played the evening cricket and netball games as part of the Action Sports leagues.

Reynolds, who at first ran the business while working as a high school teacher and sports coach, had already taken the scary step of quitting her teaching job to focus full-time on her business. But it was nothing as “hair-raising” as deciding to buy a building for R2 million so that the business could expand. If it failed, all the work she had put in up to then would come to naught, and she would sit with a mountain of debt.

But on the positive side, from the first moment she saw the building she knew it was just what Outeniqua Action Sports Arena needed. It offered space for two arenas, convenient access for clients, security of tenure for the business and the chance for Reynolds to build a solid asset instead of paying rent to a landlord.

It meant that Reynolds would virtually have to double her business in order to make it work. The banks did not have the appetite to risk their money on such a big expansion, but Business Partners Limited, which has a regional office in George, looked at the potential of the business plan and the entrepreneur and liked what they saw.

They offered to buy the building with Reynolds in a 70%-30% joint venture in favour of Outeniqua Action Sports Arena, with the further option for Reynolds to buy full ownership of the building in time.

Renovating and adjusting the building to suit the business was also scary, says Reynolds. “We had to build facilities such as the bar area that did not exist, and we didn’t know if we were doing the right thing.”

She says her wide network of friends and clients helped with advice, calculations and moral support.

Reynolds need not have worried. Almost from the start, the two arenas were fully booked, with Outeniqua Action Sports Arena introducing action hockey and soccer to complement their cricket and netball leagues. “Just by purchasing the correct building, our business has grown phenomenally,” she says.

In action sports, participants are grouped in teams of seven, and every week play at least one game that counts towards a league championship. There are four leagues per year corresponding with each season. Action sports offers its clients a social, exciting alternative to going to the gym, says Reynolds.

The business therefore operates mostly in the evenings when the games take place, although schools often make use of the facilities during the day when rain threatens outdoor practice sessions. Kiddies birthday parties over weekends also bring in an important income stream for Outeniqua Action Sports Arena.

Not all of Reynolds’ expansion plans worked out. She tried to start a similar league in rented premises in Oudtshoorn, but the town proved not to have a critical mass of population to keep the leagues going.

For the foreseeable future, Reynolds plans to focus on incremental expansion of the business around the two arenas in George by growing additional services, such as the kiosk and the bar where teams socialise before and after games, and corporate functions. She also rents out extra space in the building to a gym and other complementary businesses.

Although the business is at a point where it virtually runs itself with a day-time and night-time manager and a dozen staff members, Reynolds believes that the social nature of the business requires hands-on involvement of the owner. “I play one game of action hockey a week, two games of cricket and a game of netball a week. I like to be part of it. I think it’s very important that you interact with clients on a social level. All I have to do is say ‘Hello, how was your day?’ It is those small little things that seriously make a difference to your customer,” she says.

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