Buying a play area business? What to check before you pay

Before you buy a play area business, check four things: the real takings, the equipment, the lease and the staff. Ask for a year of daily sales split by UPI, cash and card, visits by hour, and how many families come back. Then test those records against the bank statements, the rate card and your own count of the floor at 7 pm.

This list is for anyone looking at a small walk-in play area for sale, in Kerala or anywhere in India. It is not legal or tax advice.

Which records prove the real takings?

A seller's word is not a record. Ask for these, for the last 12 months:

• Daily sales, split by UPI, cash and card. A full year shows school holidays and festival weeks, not just one good month.
• Visits by hour and by day. This shows when the floor is really busy.
• Repeat families. How many families come back each month. Regulars are a big part of what you are buying.
• Discounts, free entries and cancelled bills. Who gave them, and how often. A high total can mean staff let children in free.
• Prepaid passes and party bookings. Every pass still open, with the hours left. Every party booked for a future date, with the advance already taken.
• Running costs. Rent, electricity, wages and repair bills.

UPI and card payments land in a bank account. Ask for the bank statements for the same months, and compare the totals month by month.

Cash does not leave that trail. If the seller says "a lot of it is cash", treat that part as unproven. Ask your chartered accountant how to weigh it. Also ask them to compare the sales records with the tax returns the business has filed.

If the records are on paper, pick a few days from different months. Count the entries hour by hour, and add up the bills yourself.

How do you check the seller's numbers?

Start with simple arithmetic. These are example numbers only.

1. Monthly takings claimed. Example: ₹4.5 lakh.
2. Takings per day. ₹4.5 lakh ÷ 30 days = ₹15,000.
3. Average bill per child. Example: ₹300.
4. Children per day. ₹15,000 ÷ ₹300 = 50 children a day.

Does this floor really see 50 children a day?

Check the bill against the rate card. On the real rate cards we read, the first hour cost ₹179 to ₹499. See them in How much is one hour of play? If the average bill is far above the card, ask what makes up the gap. It may be a second hour, socks, parties or a café. Each one should show up in the records.

Check the shape of the day. We averaged Google's busyness data for 185 play centres in South India. Every day of the week peaked at 7 pm. The morning was about half as busy as the evening. A Monday evening was about three-quarters as busy as a Sunday evening. See when a play centre is actually busy.

No centre matches this exactly. But if the records show a floor as busy at 11 am as at 7 pm, ask why. Then ask to see the reason, such as school visits, in the records.

Count it yourself. Visit at 11 am and 7 pm on a weekday, and on a weekend evening. Count the children who arrive in one hour. Compare your count with the seller's record for the same hour on a similar day. Better still, ask to sit near the desk for a few evenings before you sign.

Open the Google listing. Compare its popular-times graph with the records, and read the newest reviews.

What will you owe on the day you take over?

The seller has already been paid for some things that you will have to deliver.

• Prepaid passes. More than half the rate cards we read sell a pass or a bundle of visits. Every hour left on them is an hour you give for free. See the 10-hour pass.
• Party advances. A party booked for next month may be part-paid already. The family will expect the party at the agreed price.
• Gift vouchers, if the centre sells them.

Ask for a full list, with the hours or amounts left on each. Then ask your lawyer how the sale agreement should deal with it.

How old is the equipment, and is it safe?

Ask for the purchase invoices, any warranty and the repair bills. The invoices show when each piece was bought, and from whom.

Then look at the floor yourself, with all the lights on:

• torn or loose safety nets;
• split foam and worn padding;
• safety mats that are worn, torn or lifting at the edges;
• loose bolts, rust or cracks on frames and slides;
• the ball pit, and how often it is cleaned.

Mats and nets wear out. If they look tired, add new ones to your budget. If you can, ask the original supplier to inspect the structure and quote for repairs. Our setup-cost guide shows how to price new equipment, so you can compare.

Ask to see the trade licence and the fire safety approval. Ask what limit the fire approval sets for people on the floor, and whether it counts adults. Then ask a lawyer which approvals stay with the business and which you must apply for again in your name.

What does the lease say?

The lease can matter more than the equipment. If the lease ends soon, the business may end with it. Before your lawyer reads it, find out:

• how many years are left, and whether it can be renewed;
• how much the rent goes up, and when;
• whether the landlord agrees, in writing, to the transfer to you;
• whether there is a lock-in period;
• whether the rent deposit goes back to the seller, and whether you must pay a new one;
• in a mall, the opening hours you must keep and any extra charges.

Who are the staff, and will they stay?

Ask for the list of staff, their wages, and how long each person has worked there. Talk to the person at the desk. They know the regular families and what breaks.

Ask the seller how many hours a week they work in the centre. If the owner runs the desk every evening, the profit includes no wage for that work. Add that salary to the costs.

What else should come with the business?

Write down everything the price includes. Easy things to forget: the phone and WhatsApp numbers parents use, the Google listing, the Instagram and Facebook pages, and stock such as grip socks. Ask your lawyer whether, and how, the family phone list can pass to you.

What questions should you ask the seller?

1. Why are you selling?
2. What were the takings each month for the last year, by UPI, cash and card?
3. How many families come back each month?
4. Which passes, party bookings and vouchers are still open?
5. When was each piece of equipment bought? What has been repaired?
6. How many years are left on the lease? Will the landlord agree to the transfer?
7. How many hours do you work here each week?
8. Will you stay for a few weeks after the sale to hand over?

Where PlayOps fits

If the centre already uses PlayOps, most of these records exist. The day-end report shows sales by UPI, cash and card. The whole month exports as a CSV file, with one row per visit: the times, the package, add-ons, any discount, the total and how the parent paid. The owner's reports also show busy hours, families who came more than once and discounts given. If staff have their own logins, the reports also list visits that staff deleted. See how it works.

Two limits. PlayOps records how each parent paid, but it does not move the money, so still match the totals with the bank. And it is not an accounting or tax package, so your chartered accountant still checks the books.

If you buy a centre that runs on paper, start clean records on day one. In a year, you will have the records a buyer would want from you. Try PlayOps free for a month.

What to do tomorrow

1. Ask the seller for 12 months of daily sales, split by UPI, cash and card.
2. Ask for the bank statements for the same months.
3. Visit at 11 am and at 7 pm on a weekday. Count the children who come in.
4. Do the sum: takings ÷ days ÷ average bill = children a day.
5. Ask for the list of open passes, party bookings and vouchers.
6. Find a chartered accountant and a lawyer before you sign anything.