From Space to Sustainability: The Smart Growth Formula for Children’s Activity Businesses
By Andrew Walters, Kindling Franchise Consultants
Running a successful children’s activity business isn’t about luck, it’s about strategy. Growth happens when you understand the levers that drive it, measure them carefully, and act with intention.
As part of our webinar series, our partner Andrew Walters of Kindling focused on three pillars of business growth. Capacity, occupancy, and pricing a framework for sustainable, long-term success.
Start by Asking the Right Questions
When thinking about business growth in our sector, it’s often helpful to reflect on one simple question:
“Do you know where your time is best spent right now?”
Too often, the answer isn’t based on data, it’s based on instinct.
But instinct can be misleading. You can pour energy into marketing, sales training, or customer experience, but if the data says your classes are full, none of that effort will move the needle. Likewise, if you’ve got empty spaces, expanding capacity won’t help… it will just create more empty spaces.
Growth isn’t about doing more things. It’s about doing the right thing. Your data should tell you exactly what those are, and interpreting that data needn’t be intimidating.
At Kindling, for years now we’ve worked with our clients to put in place a simple, practical framework for this: three growth levers – Capacity, Occupancy, and Pricing. Together, they give you the full picture of how your business works and, crucially, where it can grow. Knowing which lever to pull and in what order is your secret recipe to unlocking growth.
1. Capacity: Creating Room for Growth
Every business has a ceiling – its capacity – the total number of children it can serve, before anyone walks through the door.
Your capacity depends on five things:
- How many franchisees you have
- How many venues you/they operate in
- How many classes you run
- How many children you can safely and effectively accommodate per class
- The range of programmes you offer
That combination determines both your potential revenue and reach.
Why Capacity Comes First
When I was part of the leadership team at Stagecoach Performing Arts, we always first looked at the overall capacity across our hundreds of franchisees.
You can have a brilliant marketing infrastructure, and in some cases a waiting list as long as your arm — but if classes are full, you’ve hit the ceiling and additional marketing pounds are tossed away. The only way to grow is to make more space.
That could mean opening a new venue, adding an extra class, adjusting timetables, or offering new programme types. Each small change, multiplied across a network, can produce a huge cumulative effect.
Use Data to Find the Gaps
Data should drive every capacity decision. Ask yourself:
- Are all venues used efficiently?
- Could my team take on one more class each week?
- Are there underused slots where demand exists?
- Am I tracking capacity term by term, not just once a year?
The key is knowing when to increase your capacity, or alternatively when your time is best served in filling the ones you already have… that’s because occupancy is where the money is…
2. Occupancy: Turning Potential into Performance
Once capacity is set, the next question is: are you filling it?
Occupancy measures how well you’re converting potential into performance — how many of your available spaces are actually being used.
If a class can hold 20 children and you regularly have 15 attending, your occupancy rate is 75%. Simple, yes, but crucial that you know it nonetheless.
Why Occupancy Drives Profitability
In most activity-based businesses, your biggest costs are venues and staff, and are largely fixed. Once those are covered, every additional child enrolled contributes almost entirely to profit.
That’s why occupancy is so important. A full class isn’t just busier, it’s far more profitable.
The Three Levers of Occupancy
In broad terms you can improve occupancy in three ways:
- New Enrolments – attracting fresh families.
- Retention – keeping them longer.
- Progression – moving them through your ecosystem as they grow.
Each lever can make a measurable difference. Together, they transform performance.
1. Drive Quality Enrolments
Enrolment is driven by all of the touch points customers have with your business before they sign up. So everything you do matters – whether that is the marketing channels used, the messages they are influenced by, or the quality of your sales and booking platform. Understand it’s a blend of them all – learn where you are strong and weak, and focus on improvements.
2. Retain Families Longer
Retention is the quiet engine of profitability. Families stay when they see value — when their children are learning, progressing, and having fun. Build a sense of belonging. Communicate regularly. Celebrate achievements.
3. Encourage Progression
Create a clear journey for your families eg.
- Toddlers move to preschool classes
- School-age children progress to advanced or performance groups
- Holiday clubs keep engagement high year-round
The goal is to keep families in your ecosystem for as long as possible.
Let Data Lead the Way
Occupancy is where data really earns its keep. Track your numbers every term:
- Enquiries vs. conversions
- How full your classes are
- Retention and attrition
- Waiting lists and unmet demand
Then act on what you see:
- Low enquiries? Time to improve your marketing
- Low conversion? Strengthen your sales process.
- Full classes but unmet demand? Add capacity.
- High churn? Focus on retention and community.
Every business, and every venue, tells a different story. Data helps you read it.
3. Pricing: Protecting Profit and Value
Pricing is often the most emotional lever, for business owners and customers alike, but it’s also one of the most powerful.
Particularly now as costs continue their rise year after year. Venues, insurance, wages, materials — all creeping up. Yet many business owners hold prices flat, afraid of losing customers. The result? Shrinking margins and unsustainable pressure.
Price with Purpose
Don’t hold prices still for years and then make a big jump. That shocks families and erodes trust. Instead, make small, predictable adjustments — 3–4% a year — and communicate them clearly.
Consistency builds confidence.
Check the Reality Behind the Numbers
You might feel busier than ever, but if your profit margin is thinner, you’re working harder for less. If you haven’t reviewed your prices in over a year, there’s a good chance your business is less profitable than it used to be.
Communicate with Confidence
Parents understand that costs rise — they see it everywhere. The key is honesty and clarity.
“We’ve held our prices for the past two years, but due to increased venue and staffing costs, we’ll be making a small adjustment this term. This ensures we can continue delivering the high-quality classes your children love.”
Professional. Transparent. Respectful.
Control Costs, Too
Pricing isn’t just about what you charge — it’s also about what you spend. Review:
- Venue utilisation
- Supplier contracts and group purchasing options
- Marketing spend and conversion tracking
Small efficiencies, applied consistently, protect your margins without compromising quality.
Align Price with Value
Parents aren’t paying for an hour’s entertainment. They’re investing in their children’s confidence, creativity, and community. That’s the real value — and it deserves to be priced accordingly.
Growth by Design
If there’s one overarching principle I’d love to leave you with, it’s this: data should decide where you act.
If your classes are full, focus on increasing capacity.
If you have space to fill, focus on improving occupancy.
If your revenue isn’t keeping pace with your costs, focus on pricing.
Every decision should flow from what your numbers are telling you. That’s how you move from reaction to design — from working harder to working smarter.
Because sustainable growth doesn’t happen by accident. It happens when you measure, adapt, and act with purpose.
Learn more about how Kindling supports growth-minded business owners at www.kindlingfranchise.com
📧 Email: andrew@kindlingfranchise.com
📞 Phone: 01628 962206
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