Tim Cheung, Steve Shew and Jimmy Cheung pitch Battle Sports to the Dragons on CBC's Dragons' Den

(from left) Tim Cheung, Steve Shew and Jimmy Cheung of Battle Sports. Photo: CBC

More than a decade in, Dragons’ Den continues to inspire and amuse Canadian TV audiences. But the CBC’s hit show isn’t just meant to be entertaining. It’s a televised school for entrepreneurs. For each episode of Season 11 (which airs Wednesdays at 8 pm ET), we’ll be talking to one of the Dragons to get a behind-the-scenes glimpse of their decision-making process and hear what they hope viewers learned. And we’ll be examining a pitch for smart strategies and useful tips that entrepreneurs can use to make their own businesses better. Episode 17 featured three entrepreneurs with an adaptable model for entertaining the masses.

Battle Sports

Entrepreneurs: Tim Cheung, Steve Shew & Jimmy Cheung | From: Toronto
Ask: $150,000 for 10%

Operates a recreational activities facility

Smashing porcelain ornaments and outmoded electronics with your friends is the new shooting them with colourful lasers. Or at least that’s what Tim Cheung, Steve Shew and Jimmy Cheung are betting.

The “rage room” is one of four diversions offered at Battle Sports, the young entrepreneurs’ Toronto entertainment facility. (The others are dodgeball with foam-tipped arrows fired from bows, archery lessons, and nerf gun battles). The trio came up with the concept of busting things for amusement while reworking the space. “We were doing renovations in our facility, and we thought it was really fun,” Tim Cheung told the Dragons when they pitched their business in the Den.

That openness to turning over the activities on offer is the secret to the business model. “You can offer this activity or that one and just see what’s working,” says Michele Romanow. “These kind of things go into style and out of style quite quickly.”

The Battle Sports trio’s willingness to adapt, and solid margins—$360,000 in net profit on $600,000 in revenue—drew in the Dragons. Michael Wekerle and Romanow together offered the $150,000 for a 5% royalty, dropping to 2% once the initial capital was paid back. Manjit Minhas and Joe Mimran joined forces to ask for a flat 3% cut off the top. The trio chose to go with Romanow and Wekerle. (The deal didn’t close, Romanow says).

The mix of activities that Battle Sports offers helps ensure they’re not limited to one-and-done visitors. “People come in for one thing, they find out about the other cool things that we do, and they come back with their friends later on for something else,” explained Cheung. (Companies also bring employees for team-building). The young entrepreneurs planned to grow their business by licensing the rage room concept, opening up a Montreal location and eventually franchising the operation.

But first, it’s crucial to have a model that’s actually making money. “This is not something that you can scale with negative unit economics,” Romanow observed in an exclusive interview before the episode aired. “You just don’t have the infinite scaling ability [that] you have with technology.”

There’s no point in spending a lot of money outfitting a facility with expensive gadgetry and equipment if all of it will be rendered useless when the novelty of an activity wears off. “You don’t have a lot of cost when you’re destroying things,” Romanow laughs.

Better to be adaptable and nimble. That way, when the trend ends, you can quickly move onto the next entertaining gimmick. “[You can say,] ‘Now we’re doing escape rooms,’ or ‘Now we’re doing board game cafés,’ or whatever it happens to be,” says Romanow.

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