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Arcade Business

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Play and Prosper: Launching an Arcade Business

Written by: Carolyn Young

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by: David Lepeska

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

Published on April 7, 2022 Updated on August 1, 2024

Investment range

$65,000 - $130,000

Revenue potential

$156,000 - $312,000 p.a.

Time to build

1 – 3 months

Profit potential

$47,000 - $94,000 p.a.

Industry trend

Vital aspects to consider when kicking off your arcade business:

• Define your concept — Decide on the type of arcade you want to create, such as a traditional arcade, a retro-themed arcade, a family entertainment center, or an e-sports arena.
• Entertainment permits — Check local regulations and obtain any necessary permits for operating arcade games , offering food and beverages, and hosting events.
• Choose a location — Select a high-traffic location with adequate space for arcade games, seating, and additional amenities. Consider accessibility, parking, and proximity to other entertainment venues or shopping centers.
• Arcade games — Invest in a diverse selection of arcade games, including classic games, modern video games, redemption games, and interactive attractions. Regularly update your game selection to keep customers engaged.
• Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
• Legal business aspects — Register for taxes, open a business bank account, and get an EIN .
• Pricing strategy — Set competitive prices based on market research, cost analysis, and desired profit margins. Consider offering package deals, membership plans, and special promotions to attract more customers.

You May Also Wonder:

Can an arcade be profitable?

Typically, each machine can generate $200 to $400 per week in revenue. You just need to choose the best games to appeal to your target market, such as classic games for families, or action games for a younger crowd.

What games should I buy for my arcade?

You should buy games that target a certain market of people. If you want to attract families, you should buy classic arcade games and games that appeal to children. If you want to attract a younger crowd, look at the types of games that are trending, such as action games.

What arcade games are most profitable?

Generally, games that offer a high level of engagement and excitement, such as racing games, shooting games, and interactive experiences, tend to be more profitable. Games that offer the opportunity to win prizes, such as claw machines and redemption games, can also be popular and profitable.

How can I attract and retain customers in my arcade business?

To attract and retain customers in your arcade business, you can focus on providing a high-quality customer experience that is engaging, entertaining, and memorable. This may include offering a wide variety of games and experiences, providing excellent customer service, hosting special events and promotions, and utilizing technology to enhance the customer experience. 

How can I create a unique and engaging atmosphere in my arcade?

To create a unique and engaging atmosphere in your arcade, you can focus on creating a theme or ambiance that appeals to your target audience. This may include using lighting, music, and decor to create a specific atmosphere, such as a retro or futuristic vibe. 

How do I source and purchase arcade games for my business?

To source and purchase arcade games for your business, you can work with manufacturers, distributors, and wholesalers in the industry. You can also attend trade shows and industry events to learn about new games and technologies, and network with other arcade owners to get recommendations and referrals. 

Step 1: Decide if the Business Is Right for You

Pros and cons.

Starting an arcade has pros and cons to consider before deciding if it’s right for you.

• Good Money – Profit margins for arcades are high
• Fun – Play your own games whenever you want
• Growing Market – Arcades are booming as family entertainment
• High Startup Costs – Games are expensive
• Crowded Market – Compete with the likes of Dave and Buster’s

Arcade industry trends

Industry size and growth.

• Industry size and past growth – The US arcade, food and entertainment complex industry is worth $3.1 billion in 2022 after expanding more than 50% since 2020.(( https://www.ibisworld.com/industry-statistics/market-size/arcade-food-entertainment-complexes-united-states/ ))
• Growth forecast – The US arcade, food and entertainment complex industry is projected to grow 16.5% in 2022. 
• Number of businesses – In 2022, 5,634 arcade, food and entertainment businesses are operating in the US.(( https://www.ibisworld.com/industry-statistics/number-of-businesses/arcade-food-entertainment-complexes-united-states/ )) 
• Number of people employed – In 2022, the US arcade, food and entertainment complex industry employs 54,594 people.(( https://www.ibisworld.com/united-states/market-research-reports/arcade-food-entertainment-complexes-industry/ )) 

Trends and challenges

Trends in the arcade industry include:

• Virtual reality games are becoming more and more common in arcades.
• In recent years, arcades have become a popular vacation activity. 

Challenges in the arcade industry include:

• Home gaming poses a threat to the arcade industry, as many gamers prefer to play at home.
• The negative publicity that violent games receive make it a challenge for arcades to have those types of games, which are still in demand by gamers. 

How much does it cost to start an arcade business?

Startup costs for an arcade range from $65,000 to $130,000. The largest expense is for the games, which can cost between $6,000 to $9,000 each, and the space itself. 

How much can you earn from an arcade business?

The average revenue per machine is about $300 per week. Your profit margin after rent, overhead, and labor should be about 30%. 

In your first year or two, if you have 10 machines, you’ll be bringing in $156,000 in annual revenue. This would mean $47,000 in profit, assuming that 30% margin. You could add 10 more machines at this point. With annual revenue of $312,000, you’d make a tidy profit of $94,000.

What barriers to entry are there?

There are a few barriers to entry for an arcade. Your biggest challenges will be:

• The high cost of the games
• Competing with larger arcades and entertainment centers

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Step 2: hone your idea.

Now that you know what’s involved in starting an arcade, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research arcades in your area to examine their products/services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing an arcade with virtual reality games, skeeball, the claw machine or a shooting game. 

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as fighting games or classic arcade games.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Plan your arcade games and amenities

You’ll just need to determine what games to purchase. Popular games to choose from might include:

• Pinball machine
• Air hockey 
• Mortal Kombat and fighting games 
• Big Buck Hunter and shooting games
• Jurassic Park
• Retro arcade games like Pac-Man

You could also offer snacks and alcoholic beverages with the right licensing. You could even make a game and craft beer arcade.

How much should you charge for arcade games?

Individual games generally cost $.25 to $.50 to play. Some arcades offer $10 to $15 cards or unlimited play for a limited period, such as one hour for $10. You should aim for a profit margin of about 30%.

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will depend on the type of games you purchase. If you buy retro arcade games or family-oriented games, your target market will be more established people who you can find on Facebook. 

Where? Choose a location for your arcade business

You’ll need to rent a space for your arcade, preferably one with high foot traffic, such as in a mall. When considering a location, it’s also important to think about your target audience. Look for a location near schools or universities if you plan on targeting younger demographics, or near family-friendly attractions if you plan on targeting families with children.

You could also consider a location near popular nightlife spots if you plan on targeting adults. You can find commercial space to rent in your area on sites such as Craigslist , Crexi , and Instant Offices .

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm an Arcade Business Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “arcade” or “game room”, boosts SEO
• Name should allow for expansion, for ex: “Playtime Entertainment” over “Pinball Palace”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Find a Domain

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Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create an Arcade Business Plan

Here are the key components of a business plan:

• Executive Summary: Present a brief overview of your arcade business, highlighting its commitment to providing a diverse array of gaming experiences, from classic arcade games to modern virtual reality setups.
• Business Overview: Describe your business’s focus on operating an arcade that offers a variety of games, including video games, pinball machines, and redemption games.
• Product and Services: Detail the range of entertainment options, such as arcade games, party hosting services, and possibly food and beverage offerings.
• Market Analysis: Assess the demand for arcade entertainment in your area, considering factors like local demographics, entertainment trends, and family-friendly activities.
• Competitive Analysis: Compare your arcade to other local entertainment venues, focusing on your unique offerings like retro game collections, modern VR experiences, or party packages.
• Sales and Marketing: Outline your strategy for attracting customers, including advertising campaigns, social media engagement, and promotions for groups or parties.
• Management Team: Highlight the experience and skills of your team, particularly in entertainment management, customer service, and business operations.
• Operations Plan: Describe the operational aspects, including game maintenance, customer service, and facility management.
• Financial Plan: Provide an overview of financial aspects, covering startup costs, pricing strategies, and expected revenue.
• Appendix: Include supplementary documents such as equipment lists, market research data, or floor plans to support your business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to arcades. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your arcade will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC , which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization , and answer any questions you might have. 

Form Your LLC

Choose Your State

We recommend ZenBusiness as the Best LLC Service for 2024

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number , or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist , and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan .
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding an arcade business. You might also try crowdfunding if you have an innovative concept. 

Step 8: Apply for Licenses/Permits

Starting an arcade business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration ( OSHA ), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package . They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account .

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your arcade business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as  Clubspeed , centeredge , or semnox , to manage party reservations, purchases, and payments. 

• Popular web-based accounting programs for smaller businesses include Quickbooks , Freshbooks , and Xero . 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial. 

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using services like WordPress, Wix, or Squarespace . This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization ( SEO ) practices. These are steps that help pages rank higher in the results of top search engines like Google.

Here are some powerful marketing strategies for your future business:

• Theme Nights and Events: Organize themed nights or events like retro gaming nights, tournaments, or cosplay contests to create a buzz and attract diverse crowds.
• Local SEO  — Regularly update your Google My Business and Yelp profiles to strengthen your local search presence.
• Loyalty Programs: Implement a loyalty program with rewards such as free game tokens, exclusive access, or discounts for frequent visitors to encourage repeat business.
• Social Media Challenges: Leverage social media by creating interactive challenges, like high-score competitions or user-generated content contests, to boost online engagement and attract a wider audience.
• Partnerships with Local Businesses: Establish partnerships with nearby restaurants, cinemas, or entertainment venues to cross-promote and offer joint discounts, expanding your customer base.
• Themed Decor and Ambiance: Enhance the overall customer experience by investing in themed decor and ambiance that aligns with popular gaming trends, creating a unique and immersive environment.
• Student and Group Discounts: Attract students and larger groups by offering special discounts during off-peak hours or designated days, fostering a sense of community and encouraging group visits.
• Mobile App Integration: Develop a mobile app for your arcade that allows users to check real-time availability of games, receive special offers, and accumulate points for discounts.
• Community Engagement: Actively engage with the local community by sponsoring school events, sports teams, or charity initiatives, establishing a positive reputation and building a supportive customer base.
• Referral Programs: Encourage word-of-mouth marketing by implementing referral programs where existing customers receive bonuses or discounts for bringing in new patrons.
• Dynamic Pricing: Implement dynamic pricing strategies, such as happy hour discounts or variable pricing based on peak hours, to optimize revenue and attract customers during slower periods.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your arcade meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your arcade business could be: 

• Family fun for all with classic arcade games
• Beat your friends at all the hottest games!
• Craft beer and the best retro arcade games

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running an arcade, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in arcades for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in arcades. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for an arcade business include:

• Arcade Attendants – take payments, assist customers
• General Manager – scheduling, accounting
• Marketing Lead – SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed , Glassdoor , or ZipRecruiter . Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run an Arcade Business – Start Making Money!

Arcades are booming as the industry roars back after the pandemic. With an investment in games and a good location, you could start your own arcade and make good money riding the industry wave. The keys are to buy games that will appeal to a certain target audience, have a great location, and provide a great customer experience.

You came to the right place to learn about the business, and now you’re ready to get your game on and start your successful arcade!

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• Decide if the Business Is Right for You
• Hone Your Idea
• Brainstorm an Arcade Business Name
• Create an Arcade Business Plan
• Register Your Business
• Register for Taxes
• Fund your Business
• Apply for Licenses/Permits
• Open a Business Bank Account
• Get Business Insurance
• Prepare to Launch
• Build Your Team
• Run an Arcade Business - Start Making Money!

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How to Write an Arcade Business Plan + Free Sample Plan PDF

Elon Glucklich

7 min. read

Updated April 3, 2024

Free Download: Sample Entertainment Business Plan Templates

Once headed for extinction, the arcade has made a comeback. 

There are now nearly 7,000 arcades and entertainment centers across the U.S., and the sheer range of gaming options means there are plenty of opportunities for entrepreneurs looking to carve out a niche in their community.

But to build a successful business around people’s love of gaming, you need to make sure that:

• There’s a big enough market for your arcade to be financially viable.
• You’re offering something that competitors aren’t.
• You have a plan to staff the arcade and keep machines operational.
• If you’re operating an arcade bar, you need to ensure minors aren’t getting access to alcohol.

You can account for all of these concerns and improve your chances of starting a profitable arcade by writing a business plan. Plus, if you’re looking for a bank loan or investment to cover major costs like new arcade machines, they’ll need to see your plan before they’ll consider funding you.

Those are just a few of the concerns an arcade business owner might deal with. And it’s why writing a business plan will keep you focused on your market opportunity and run your operation smoothly. 

• What should you include in an arcade business plan?

Here are a few sections we recommend including in an arcade business plan:

Executive summary

• Products & services

Market analysis

Operational plan, financial plan.

There’s a traditional format that you can follow when writing your business plan .  But don’t feel like you have to follow that structure if you aren’t looking for funding. 

At its heart, a business plan is about creating a growth strategy for your arcade, so focus on the sections most relevant to your situation.

The executive summary introduces the reader to your arcade business. It’s typically written last, because it summarizes your whole plan. But it needs to be engaging.

Start by outlining your arcade’s unique concept and mission. Do you focus on:

• Classic arcade games
• Cutting-edge gaming systems (i.e. virtual reality)
• Competitive play (tournaments)

Next, highlight what sets you apart . Maybe you have a massive game selection, exciting prizes to win, or an appealing food and beverage concept. Tie these features to the desires of your target market and the role your business will play in the community.

Briefly touch on your qualifications, financial outlook and long-term goals as well. Do you have experience in business, entertainment, or the gaming industry? If you’re seeking funding, how much do you need, and how will you use it?

Products and services

The products and services section details the experiences you offer customers, and revenue streams you generate. Start with your core service.

Arcade Games

List the types of games you offer, such as:

• Classic cabinets
• Pinball machines
• Modern gaming consoles
• Cutting-edge gaming experience like VR
• Interactive games

Some arcades specialize in a type of gaming experience, like retro or sports games. If you’re focusing on a specific genre or era, explain in your business plan why choosing that segment over others gives you an advantage.

Then think beyond the arcade games themselves. Additional revenue streams may include:

• Food and drinks
• Events and tournaments
• Merchandise
• Party packages

If you’re already operational, mention any services that have proven successful.

To build a successful arcade with a steady customer base, you must deeply understand your target customers and the arcade industry.

A good place to start in your market analysis is to identify the characteristics of your ideal player:

These include demographic factors, like:

• Income level

Are you catering to teens, young adults, or families? Do you expect your customers to be mostly from the area around your arcade, or can you draw people from farther away? Based on average incomes in your area, do you expect cheaper, coin-operated games to be your most popular attraction? Or can you get customers to pay more for premium games, meals, and drinks?

You should also consider the psychographic characteristics of your customers. These are about your customers’ motivations. Are they seeking:

• Stress relief
• Social outings
• Serious competition

The answer to these questions can help determine how to position your arcade to potential customers, as well as the types of arcade games to purchase.

Competitive analysis

Understanding the competitive landscape is an extension of your market research. But due to the complexity of the arcade gaming competition, it’s worth separating into its own section.

Start by listing your rivals:

• Direct Competitors: Other arcades, especially those with a similar concept or location.
• Indirect Competitors: Family entertainment centers, bowling alleys, home gaming systems – anywhere people spend leisure time and money.

Analyze their strengths and weaknesses. Consider:

• Game Selection: Do they offer a similar mix, or specialize in specific genres?
• Atmosphere: Is it modern, family-friendly, or geared toward serious gamers?
• Pricing & Promotions: How do their prices compare to yours? Do they run specials or loyalty programs?
• Customer Experience: Look at online reviews – what do people praise or criticize?

The key to your competitive analysis is determining what will make people choose your arcade over other options. It could be that you have a larger selection of games, or a more approachable atmosphere. Clearly spell out your competitive advantage in your business plan.  

Your operational plan maps out the day-to-day work that keeps your arcade running smoothly. Here’s what to cover:

Describe your space

• Square footage
• Special features (party room, kitchen, etc.)

If you haven’t secured a location, outline your ideal requirements.

• Arcade machines
• Coin and token machines
• Kitchen and bar equipment
• Food and drink supplies
• Cleaning supplies

Archase games require periodic upkeep, so be sure to outline your plan for regular maintenance and how you’ll handle unexpected breakdowns. Also, detail where you will source games, parts, prices, food and drinks.

The complexity of your operational plan depends on your arcade’s size and staffing needs. A simple arcade might have a shorter section, while a large entertainment complex will need a more detailed plan.

Your arcade financial plan is where you demonstrate that you can turn your vision into a sustainable business that operates for years to come.

Startup Costs : If you’re seeking funding to start an arcade, detail your costs to launching, like buying arcade machines, building renovations, and initial inventory needs. Be sure to demonstrate exactly how those funds will help you succeed.

Sales forecast : Project your revenue from game plays, prizes, food and drinks, events, and any other income sources. Be realistic, especially in the early months.

Expense Budget : Think carefully about all of your costs, then list them out. Typical expenses include:

• Rent and utilities
• Game purchases/leases
• Maintenance & repairs
• Supplies (prizes, food, etc.)
• Insurance, marketing, licensing, and fees

Profit & Loss (P&L) : This combines your revenue streams and expenses, demonstrating whether your projections show a profit.

Cash flow statement : Regardless of how successful you think your arcade will be over time, you always need to have enough cash on hand to pay bills and avoid running into shortages. 

Balance Sheet : An overview of your arcade’s financial health, listing assets (like your games), liabilities (loans), and overall equity.

Important Notes

Assumptions: Be clear about any predictions you’re making (number of customers, growth rate, etc.). If you’re writing your business plan in hopes of getting a bank loan, they’ll want to see that you’ve thought through your projections.

Industry Research: Try to find sample financials from other arcades to make sure you’re not missing any key expenses. At the very least, research typical arcade expenses online.

• Download your free entertainment sample business plan

You can download any of our entertainment business plan samples for free right now to get inspiration for your own plan. Or, browse the Bplans library of over 550 free sample business plans to see what plans in other industries look like.

With competition from other arcades, large entertainment centers and home gaming systems, identifying your niche as an arcade destination is crucial for your success.

Writing a business plan keeps you disciplined in your entrepreneurial journey by ensuring you focus on gaming experiences with a high return on investment. And remember, a bank or investor won’t fund you without one.

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Elon is a marketing specialist at Palo Alto Software, working with consultants, accountants, business instructors and others who use LivePlan at scale. He has a bachelor's degree in journalism and an MBA from the University of Oregon.

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Arcade Business Plan Template

Written by Dave Lavinsky

Arcade Business Plan

You’ve come to the right place to create your Arcade business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Arcades.

Below is a template to help you create each section of your Arcade business plan.

Executive Summary

Business overview.

Hal’s Arcade is a new ultimate arcade gaming experience located in downtown Seattle, Washington. We offer every game you can imagine from classic arcade games to one of a kind VR experiences. We aim to be the #1 arcade in the Seattle area and guarantee that every customer who visits us will find a game they will enjoy.

Hal’s Arcade is founded and run by Hal Jenkins. Hal has loved arcade games his whole life and has dreamed of opening up a local arcade in his local neighborhood. After years of planning and saving money, he finally is ready to lease an arcade space and start his dream business.

Product Offering

Hal’s Arcade is the best place in town for the ultimate arcade experience. We provide hundreds of games and activities so everyone who visits us can find something to enjoy. We expect that our most popular games will be classic arcade games, VR games, multiplayer sports games, and first person shooters. We also serve food and drink and have prizes and merchandise that can either be purchased with tickets won from games, cash/credit cards, or arcade cards. Groups can reserve private rooms for private parties and celebrations.

Customer Focus

Hal’s Arcade will serve the residents of the Seattle, Washington area. The city is full of families, groups, and individuals who love to connect with their inner child through arcade games. We are open to anyone who wants to spend a few hours playing in our arcade.

Management Team

Hal’s Arcade is founded and run by Hal Jenkins. Hal grew up playing arcade games with his father and brothers and has fond memories in arcades and gaming centers. He has dreamed his whole life of running his own arcade that can be the background to similar memories for other residents in the Seattle area. His goal is to build and run the most popular arcade in the Seattle area.

Success Factors

Hal’s Arcade will be able to achieve success by offering the following competitive advantages:

• An arcade card that makes the arcade experience more convenient and enjoyable.
• Modern and comfortable environment with a family-friendly atmosphere.
• Moderate pricing that everyone can afford.
• Friendly and helpful staff.

Financial Highlights

Hal’s Arcade is seeking $425,000 in debt financing to launch its arcade. The funding will be dedicated towards securing the arcade space and purchasing equipment, opening inventory, and working capital. The breakout of the funding is below:

• Arcade space build-out: $100,000
• Opening inventory, supplies, equipment, decorations: $200,000
• Three months of overhead expenses (payroll, rent, utilities): $50,000
• Marketing costs: $50,000
• Working capital: $25,000

The following graph below outlines the pro forma financial projections for Hal’s Arcade.

Company Overview

Who is hal’s arcade.

  Customers who visit our arcade have the option to purchase an arcade card. The card can be used to purchase anything in the building, including games, prizes, merchandise, and food. It can also be used to store tickets that are won from our games.

Hal’s Arcade is founded and run by Hal Jenkins. Hal has loved arcade games his whole life and has dreamed of opening up a local arcade in his local neighborhood. He loves seeing the joy that arcade games bring to others and is eager to start a business that will bring that joy to his customers. After considerable planning, Hal is now ready to open up his arcade.

Hal’s Arcade History

Before starting his business, Hal conducted a market analysis and consumer survey to see how popular his arcade would be. Luckily, the results from both show that many local residents would be excited to frequent the new arcade. After Hal finished his analysis and survey, he incorporated his new arcade as an S-Corporation on May 1st, 2023. Since incorporation, Hal’s Arcade has achieved the following milestones:

• Developed the arcade’s branding image, social media, and website
• Found a location and signed a Letter of Intent to lease it
• Finalized food and drink menus
• Found supplies who can source prizes and merchandise
• Began recruiting key employees

Hal’s Arcade Services

Hal’s Arcade is the best place in town for the ultimate arcade experience. We provide hundreds of games and activities so everyone can find something to enjoy. Some of the types of games we provide include:

• Classic arcade games
• Multiplayer sports and racing games
• First person shooters

Customers can also purchase food and drinks while they play. We offer a full menu of options, including sandwiches, burgers, and pizza. Large groups can reserve private rooms for parties and special events.

Customers have the option to purchase an arcade card when they come to our arcade. Everything in the building can be bought with this card, including food and prizes. Furthermore, tickets won from our games will be stored on the card. This makes the arcade experience more convenient as every transaction can be stored on this card. Customers don’t have to worry about the hassle of finding the right credit card or carrying hundreds of tickets as they walk around the arcade.

Industry Analysis

The Arcade industry in the United States is expected to increase in revenue over the next five years. Consumers are expected to continue spending money on entertainment experiences and for food and drink at restaurants and similar establishments. Growth during most of the period will be supported by increased consumer spending and per capita expenditure on food, drink, and gaming experiences. Growth is also influenced by consumers’ excitement to go out and enjoy themselves after being cooped indoors during the pandemic years.

Though the industry declined during the pandemic years, the arcade industry is expected to recover. According to Data Bridge Market Research, the industry is expecting to grow at a CAGR of 5.10% from now until 2029. This growth should be enough to help the industry recover from the pandemic and sustain new growth and profit. Therefore, this is a great time to open up a new arcade.

Customer Analysis

Demographic profile of target market.

Hal’s Arcade will serve all the residents of the Seattle, Washington area who are craving the experience of a fun, local arcade. Everyone is welcome but we expect our target demographic to be mostly young adults, families, and large groups.

Customer Segmentation

Hal’s Arcade will primarily target the following customer profiles:

• Young adults
• Large groups/special events

Competitive Analysis

Direct and indirect competitors.

Hal’s Arcade will face competition from other companies with similar business profiles. A description of each competitor company is below.

Terry’s Arcade

Terry’s Arcade has been the go-to family arcade experience for decades. Terry’s prides itself on its selection of retro and vintage arcade games that have been around for several decades. The arcade has hundreds of options to choose from and even provides skee ball, air hockey, and other activities. They also sell snacks, drinks, and merchandise for customers to enjoy while playing in the arcade.

Chuck’s Arcade Palooza

Chuck’s Arcade Palooza is a small arcade center that has gained a lot of popularity. Though they are not a large facility, they still cram their arcade with some of the most popular arcade games of today and yesterday. Chuck’s has received consistent raving reviews for years, and is a hotspot for entertainment for young adults throughout the Seattle area.

Seattle’s Center of Fun

Seattle’s Center of Fun has been a popular spot for local kids and family entertainment for decades. Providing numerous games and activities, Seattle’s Center of Fun is a great place to take your kids for a party, event, or night out. The center is far more than just an arcade. In addition to providing hundreds of arcade games, Seattle’s Center of Fun also offers a full restaurant, a bowling alley, and private rooms for large parties and special events. The center has everything one could want in a fun family night out.

Competitive Advantage

Hal’s Arcade will be able to offer the following advantages over the competition:

• Convenient Location : We will be located in downtown Seattle in a convenient location that all residents can easily access.
• Management : Our management has considerable experience in the industry and has a passion to provide the best customer service possible.
• Affordability : Our pricing will be moderate so all of our customers can afford to enjoy our games and food.

Marketing Plan

Brand & value proposition.

Hal’s Arcade will offer the unique value proposition to its clientele:

• High-quality food and drinks
• Largest selection of arcade games in town
• Premier arcade experience
• High-quality merchandise and prizes
• Family-friendly atmosphere
• Excellent customer service

Promotions Strategy

The promotions strategy for Hal’s Arcade is as follows:

Hal’s Arcade’s location is a promotion strategy in itself. It will be located in a popular and convenient location in downtown Seattle. The area is full of other family-friendly businesses as well as nightclubs and other popular locations.

Social Media Marketing

Hal’s Arcade will use social media to cater to the young adults and the social media obsessed portion of Seattle. Hal will create TikTok, Instagram, Twitter, and Facebook business accounts to post “Coming Soon” announcements as well as images of the arcade and the games we will have.

SEO Website Marketing

The arcade will invest funds into maintaining a strong SEO presence on search engines like Google and Bing. When a person types in “local arcade” or “Seattle arcade”, Hal’s Arcade will appear in the top three choices. The website will include the full menu, location, and list of games customers can play.

Merchandise

We will sell attractive merchandise with our logo and business name on it. When people see our merchandise, they will instantly recognize how fun and exciting our establishment is and want to see the arcade for themselves.

The pricing of Hal’s Arcade will be moderate and on par with competitors so customers feel they receive value when visiting our arcade.

Operations Plan

The following will be the operations plan for Hal’s Arcade. Operation Functions:

• Hal Jenkins will be the Owner/Operator of the arcade as well as the Manager. He will oversee the general operations of the arcade as well as interact with guests. To launch the arcade, Hal needs to hire the following staff:
• 10 wait staff who can wait on guests, serve food and drinks, and help customers throughout the arcade.
• 5 kitchen staff who will cook customers’ meals.
• 2 maintenance staff who can keep all the arcade games in working order.
• A Marketing Manager to develop the website, social media accounts, photography, and maintain the SEO presence.
• An Accountant who will handle the company’s accounting.

Milestones:

Hal’s Arcade will have the following milestones complete in the next six months.

• 6/1/2023 Finalize lease agreement
• 7/1/2023 Start design and build out of Hal’s Arcade
• 8/1/2023 Begin marketing campaign
• 9/1/2023 Finish design and build out
• 10/1/2023 Hire key staff
• 11/1/2023 Open Hal’s Arcade

Hal’s Arcade is founded and run by Hal Jenkins. Hal grew up playing arcade games with his father and brothers and has fond memories in arcades and gaming centers. He has dreamed his whole life of running his own arcade that can be the background to similar memories for other residents in the Seattle area.

For the past few years, Hal has managed a local arcade and gained considerable knowledge on the operations and management sides of running such a business. Though Hal does not have any experience running his own company, he will hire several staff who can help him manage the operations, marketing, and accounting aspects of the business.

Financial Plan

Key revenue & costs.

The key revenues for Hal’s Arcade will primarily come from charging customers to play our games. We also expect much of our revenue to come from selling food and drinks as well as prizes and merchandise.

The major cost drivers for the company will include equipment purchasing and maintenance, marketing expenses, salaries, overhead costs, and costs of supplies and food inventory.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and pay off the startup business loan.

• Initial Number of Customers Per Day: 200
• Average Meal Order Value: $50
• Average Arcade Spending Per Customer: $50
• Annual Lease: $100,000

Financial Projections

Income statement.

Balance Sheet

Cash Flow Statement

Arcade Business Plan FAQs

What is an arcade business plan.

An arcade business plan is a plan to start and/or grow your arcade business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Arcade business plan using our Arcade Business Plan Template here .

What are the Main Types of Arcade Businesses? 

There are a number of different kinds of arcade businesses , some examples include: Vintage games and pinball machines, Redemption games, Interactive games, Barcades.

How Do You Get Funding for Your Arcade Business Plan?

Arcade businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start an Arcade Business?

Starting an arcade business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop An Arcade Business Plan - The first step in starting a business is to create a detailed arcade business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast. 

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your arcade business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your arcade business is in compliance with local laws.

3. Register Your Arcade Business - Once you have chosen a legal structure, the next step is to register your arcade business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your arcade business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary Arcade Equipment & Supplies - In order to start your arcade business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your arcade business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful arcade business:

• How to Open an Arcade

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Arcade Business Plan

Starting an arcade business has several of its own perks—of course, high-profit potential, diversified revenue streams, and flexible hours are there, but apart from, all that you also get to be the ultimate boss of fun and entertainment.

Sounds fun, isn’t it?

But before you start racking up those high scores, you need a solid arcade business plan in place to succeed.

Need help writing a business plan for your arcade business? You’re at the right place. Our arcade business plan template will help you get started.

Free Business Plan Template

Download our free business plan template now and pave the way to success. Let’s turn your vision into an actionable strategy!

• Fill in the blanks – Outline
• Financial Tables

How to Write an Arcade Business Plan?

Writing an arcade business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:

1. Executive Summary

An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.

Here are a few key components to include in your executive summary:

Introduce your business:

Start your executive summary by briefly introducing your business to your readers.

This section may include the name of your arcade business, its location, when it was founded, the type of arcade business (E.g., traditional arcades, family entertainment centers, mobile arcades.), etc.

Market opportunity:

Summarize your market research, including market size, growth potential, and marketing trends. Highlight the opportunities in the market and how your business will fit in to fill the gap.

Product and services:

Highlight the services your arcade business will offer your clients. The USPs and differentiators you offer are always a plus.

For instance, you may include arcade games, virtual reality experiences, and eSports tournaments as your services and mention unique experiences and a variety of games as some of your USPs.

Marketing & sales strategies:

Outline your sales and marketing strategies—what marketing platforms you use, how you plan on acquiring customers, etc.

Financial highlights:

Briefly summarize your financial projections for the initial years of business operations. Include any capital or investment requirements, associated startup costs, projected revenues, and profit forecasts.

Call to action:

Summarize your executive summary section with a clear CTA, for example, inviting angel investors to discuss the potential business investment.

Ensure your executive summary is clear, concise, easy to understand, and jargon-free.

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2. Business Overview

The business overview section of your business plan offers detailed information about your business. The details you add will depend on how important they are to your business. Yet, business name, location, business history, and future goals are some of the foundational elements you must consider adding to this section:

Business description:

• Describe what kind of arcade business you run and the name of it. Here are some of the common types of arcade or gaming businesses:
• Traditional arcade
• Family entertainment center
• Mobile arcade
• eSports arcade
• Retro arcades
• Describe the legal structure of your arcade business, whether it is a sole proprietorship, LLC, partnership, or others.
• Explain where your business is located and why you selected the place.

Mission statement:

Business history:.

• Additionally, If you have received any awards or recognition for excellent work, describe them.

Future goal:

This section should provide a thorough understanding of your business, its history, and its future plans. Keep this section engaging, precise, and to the point.

3. Market Analysis

The market analysis section of your business plan should offer a thorough understanding of the industry with the target market, competitors, and growth opportunities. You should include the following components in this section.

Target market:

Start this section by describing your target market. Define your ideal customer and explain what types of services they prefer. Creating a buyer persona will help you easily define your target market to your readers.

For instance, teenagers, children, and families looking for fun and entertainment activities can be an ideal target market for an arcade business.

Market size and growth potential:

Describe your market size and growth potential and whether you will target a niche or a much broader market.

Competitive analysis:

Identify and analyze your direct and indirect competitors. Identify their strengths and weaknesses, and describe what differentiates your gaming services from them. Point out how you have a competitive edge in the market.

Market trends:

Analyse emerging trends in the industry, such as technology disruptions, changes in customer behavior or preferences, etc. Explain how your business will cope with all the trends.

For instance, virtual reality is disrupting the traditional arcade market. Explain how your business will use these technologies for sustainable business growth.

Regulatory environment:

List regulations and licensing requirements that may affect your arcade business, such as business registration, zoning regulations, employment laws, gaming laws, health and safety regulations, etc.

Here are a few tips for writing the market analysis section of your arcade business plan:

• Conduct market research, industry reports, and surveys to gather data.
• Provide specific and detailed information whenever possible.
• Illustrate your points with charts and graphs.
• Write your business plan keeping your target audience in mind.

4. Products And Services

The product and services section should describe the specific services and products that will be offered to customers. To write this section should include the following:

Describe your services:

Mention the arcade services your business will offer. This list may include services like,

• Virtual Reality experience
• eSports tournaments
• Prize redemption
• Arcade games sales or rental
• Hosting corporate events

Arcade games:

Describe the types of arcade games your facility will offer to game enthusiasts, including classing games, modern games, and games with advanced tech and graphics.

Quality measures:

This section should explain how you maintain quality standards and consistently provide the highest quality service.

Your quality measures may include regular maintenance of games, maintaining cleanliness, food and beverage quality, game variety, etc.

Additional Services:

Mention if your arcade offers any additional services. You may include services like party and event rentals, game sales and rental, serving food and beverages, and if there are any additional services.

In short, this section of your arcade plan must be informative, precise, and client-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.

5. Sales And Marketing Strategies

Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:

Unique selling proposition (USP):

Define your business’s USPs depending on the market you serve, the equipment you use, and the unique services you provide. Identifying USPs will help you plan your marketing strategies.

For example, games with advanced graphics, vintage arcade games, unique experiences, and a family-friendly environment could be some of the great USPs for an arcade business.

Pricing strategy:

Describe your pricing strategy—how you plan to price your gaming services and stay competitive in the local market. You can mention any discounts you plan on offering to attract new customers to your facility.

Marketing strategies:

Discuss your marketing strategies to market your services. You may include some of these marketing strategies in your business plan—social media marketing, Google ads, brochures, email marketing, content marketing, and print marketing.

Sales strategies:

Outline the strategies you’ll implement to maximize your sales. Your sales strategies may include cross-business promotions, providing group discounts, hosting local gaming events, and providing referral discounts.

Customer retention:

Describe your customer retention strategies and how you plan to execute them. For instance, introducing loyalty programs, discounts on annual membership, personalized service, etc.

Overall, this section of your arcade or game zone business plan should focus on customer acquisition and retention.

Have a specific, realistic, and data-driven approach while planning sales and marketing strategies for your arcade business, and be prepared to adapt or make strategic changes in your strategies based on feedback and results.

6. Operations Plan

The operations plan section of your business plan should outline the processes and procedures involved in your business operations, such as staffing requirements and operational processes. Here are a few components to add to your operations plan:

Staffing & training:

Mention your arcade business’s staffing requirements, including the number of employees, game technicians, or support staff needed. Include their qualifications, the training required, and the duties they will perform.

Operational process:

Include the processes and procedures you will use to run your arcade business. Your operational processes may include game maintenance, cash management, inventory management, cleaning and maintenance, customer service, marketing, and sales.

Include the list of equipment and machinery required for the arcade, such as arcade games, cash registers, ticket dispensers, security cameras, maintenance tools, game tokens or cards, and other equipment.

Explain how these technologies and equipment help you maintain quality standards and improve the efficiency of your business operations.

Adding these components to your operations plan will help you lay out your business operations, which will eventually help you manage your business effectively.

7. Management Team

The management team section provides an overview of your arcade business’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.

Founder/CEO:

Mention the founders and CEO of your arcade business, and describe their roles and responsibilities in successfully running the business.

Key managers:

Introduce your management and key team members, and explain their roles and responsibilities.

It should include key executives, senior management, and other department managers (e.g., Arcade manager, Game Technician manager.) involved in the arcade business operations, including their education, professional background, and any relevant experience in the gaming industry.

Organizational structure:

Explain the organizational structure of your management team. Include the reporting line and decision-making hierarchy.

Compensation plan:

Describe your compensation plan for the management and staff. Include their salaries, incentives, and other benefits.

Advisors/consultants:

Mentioning advisors or consultants in your business plans adds credibility to your business idea.

So, if you have any advisors or consultants, include them with their names and brief information about roles and years of experience.

This section should describe the key personnel for your arcade services, highlighting how you have the perfect team to succeed.

8. Financial Plan

Your financial plan section should summarize your business’s financial projections for the first few years. Here are some key elements to include in your financial plan:

Profit & loss statement:

Describe your projected revenue, operational, and service costs in your projected profit and loss statement. Make sure to include your business’s expected net profit or loss.

Cash flow statement:

This section should estimate and describe the cash flow for the first few years of your operation. This may include billing invoices, payment receipts, loan payments, and any other cash flow statements.

Balance sheet:

Create a projected balance sheet documenting your arcade business’s assets, liabilities, and equity.

Break-even point:

Determine and mention your business’s break-even point—the point at which your business costs and revenue will be equal.

This exercise will help you understand how much revenue you need to generate to sustain or be profitable.

Financing needs:

Calculate costs associated with starting an arcade business, and estimate your financing needs and how much capital you need to raise to operate your business. Be specific about your short-term and long-term financing requirements, such as investment capital or loans.

Be realistic with your financial projections, and make sure you offer relevant information and evidence to support your estimates.

9. Appendix

The appendix section of your plan should include any additional information supporting your business plan’s main content, such as market research, legal documentation, financial statements, and other relevant information.

• Add a table of contents for the appendix section to help readers easily find specific information or sections.
• In addition to your financial statements, provide additional financial documents like tax returns, a list of assets within the business, credit history, and more. These statements must be the latest and offer financial projections for at least the first three or five years of business operations.
• Provide data derived from market research, including stats about the arcade industry, user demographics, and industry trends.
• Include any legal documents such as permits, licenses, and contracts.
• Include any additional documentation related to your business plan, such as product brochures, marketing materials, operational procedures, etc.

Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.

Remember, the appendix section of your game zone business plan should only include relevant and important information supporting your plan’s main content.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

This sample arcade business plan will provide an idea for writing a successful arcade plan, including all the essential components of your business.

After this, if you still need clarification about writing an investment-ready business plan to impress your audience, download our arcade business plan pdf .

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Frequently asked questions, why do you need an arcade business plan.

A business plan is an essential tool for anyone looking to start or run a successful arcade business. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.

Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your arcade business.

How to get funding for your arcade business?

There are several ways to get funding for your arcade business, but self-funding is one of the most efficient and speedy funding options. Other options for funding are:

Small Business Administration (SBA) loan

Crowdfunding, angel investors.

Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.

Where to find business plan writers for your arcade business?

There are many business plan writers available, but no one knows your business and ideas better than you, so we recommend you write your arcade business plan and outline your vision as you have in your mind.

What is the easiest way to write your arcade business plan?

A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any arcade business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software.

About the Author

Upmetrics Team

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How to Start an Arcade

Arcades are still a popular business type, because many customers enjoy an in-person social gaming experience. Even though online gaming is more popular than ever, playing games with others virtually via home-entertainment consoles or smartphones can still feel like an isolating experience. An arcade provides a physical space where fun gaming experiences can be shared with family and friends.

Ready to turn your business idea into a reality? We recommend forming an LLC as it is the most affordable way to protect your personal assets. You can do this yourself or with our trusted partner for a small fee. Northwest ($29 + State Fees) DIY: How to Start an LLC

Start an arcade by following these 10 steps:

• Plan your Arcade
• Form your Arcade into a Legal Entity
• Register your Arcade for Taxes
• Open a Business Bank Account & Credit Card
• Set up Accounting for your Arcade
• Get the Necessary Permits & Licenses for your Arcade
• Get Arcade Insurance
• Define your Arcade Brand
• Create your Arcade Website
• Set up your Business Phone System

We have put together this simple guide to starting your arcade. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas .

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

What will you name your business?

• What are the startup and ongoing costs?
• Who is your target market?

How much can you charge customers?

Luckily we have done a lot of this research for you.

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Arcade Name Generator

If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name , we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability .

It's very important to secure your domain name before someone else does.

Find a Domain Now

Powered by godaddy.com, what are the costs involved in opening an arcade.

Your costs will vary considerably, depending on what kind of arcade you start. A traditional arcade might be able to get by in a small space, and you could keep your costs down in the $250,000 range. For a larger entertainment center like Dave and Buster’s, costs could approach $1 million.

The biggest portion of an arcade’s startup cost is usually the games themselves. Costing anywhere from $6,000 to $9,000, even a modest selection of 20 games eats up about half of that low-end $250k budget. You’ll also need to lease a space, and that cost will vary depending on your location and the size of your arcade. A rough estimate would be in the $1,200-$2,800 per month range for a space between 3,000 and 5,000 square feet.

The remainder of your budget will go toward acquiring additional machinery like computers and cash registers, renovating and decorating the space, and licensing fees. Finally, you’ll also need to pay your staff, although arcades require fewer employees than many other business types. Of course, if your arcade will serve food or beverages, you will also have additional costs for purchasing machines and supplies to that end.

Read our arcade purchasing guide to learn about the materials and equipment you'll need to start an arcade, how much to budget, and where to make purchases.

What are the ongoing expenses for an arcade?

The primary ongoing expenses are rent and machine upkeep. Utilities are also a constant factor, and with electronic machines running all day, they may cost more than you expect. For example, a successful barcade chain in Texas pays $15,000 a month for utilities at their smallest location. Beyond that, monthly expenses go to things like paying employees and keeping everything clean.

As your arcade acquires more consoles, there may not be enough room to keep them all at your arcade. Keeping a rotation of machines would require a storage space for unused machines, but this is not typical of small arcades, and would not be an issue in the early stages of your business.

Who is the target market?

Your preferred customer will vary depending on what type of arcade you run. Traditional arcades are frequented by families and children; families can use arcade gaming as a bonding experience, while kids occupy the sweet spot of having disposable income without many entertainment options to spend it on. Meanwhile, “barcades” market to retro-loving hipsters who like to pair craft beer with vintage pinball. Finally, arcade/restaurant combos like Dave and Buster’s appeal to a variety of customers, from families to business people looking to blow off steam after work.

How does an arcade make money?

The standard model is charging customers to play your games, but there are a number of ways to do this. The old-school method of having your customers insert coins or tokens into the machines is still around, but there are some licensing and taxation issues that make this method less profitable than it may seem. Also, many people don’t carry cash at all any more, not to mention quarters. Another popular model involves charging an upfront fee for a certain time period of free play, such as $5 for 30 minutes. The model popularized by Dave and Buster’s has customers purchase gaming “points” on a swipeable card, which allows you to charge more for certain games.

This is largely dependent on the business model you choose, as discussed earlier. If your customers pay with quarters or pre-paid cards — rather than timed free play — many arcades charge more for newer games (between 50 cents and a dollar) and less (around a quarter) for vintage games. You can also incentivize upfront spending by offering bonus points or free plays if they spend a certain amount of money.

How much profit can an arcade make?

This depends greatly on the volume of customers, cost of upkeep, and the amount you invest back into your business. As mentioned earlier, each game can potentially bring in $10,000 per year, which adds up. One successful entrepreneur who owns three small arcades brought in $165,000 in profits in 2014. Keep in mind that your take-home profit will also vary depending on how much you invest in your business to maintain its profitability into the future.

How can you make your business more profitable?

Using a points-based card system instead of taking quarters can increase profits, both because it encourages people to play more, and due to some outdated tax laws concerning the use of quarters. A classic method of boosting arcade profits is to offer games where customers can redeem tickets for prizes, encouraging them to keep returning to the machines to “earn” more tickets. We’ve also already discussed some other options, like adding food and beverage service, or having happy hours.

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

One crucial aspect that cannot be overlooked when starting your arcade is the importance of establishing a solid business foundation. While sole proprietorships and partnerships are the most common entity types for small businesses, they're a far less stable and advantageous option than LLCs.

This is because unincorporated business structures (i.e., sole proprietorships and partnerships) expose you as an owner to personal liability for your busines's debts and legal actions, while LLCs protect you by keeping your personal assets separate from your business's liabilities.

In practice, this means that if your arcade were to face a lawsuit or incur any debts, your savings, home, and other personal assets could not be used to cover these costs. On top of this, forming your business as an LLC also helps it to appear more legitimate and trustworthy.

More than 84% of our readers opt to collaborate with a professional LLC formation service to kickstart their venture. We've negotiated a tailored discount for our readers, bringing the total down to just $29.

Form Your LLC Now

Note: If you're interested in more information before getting started, we recommend having a look at our state-specific How to Start an LLC guide (DIY) or our in-depth Best LLC Services review (for those opting for a professional service).

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN through the IRS website . If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history , which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

In most states, it is necessary to obtain a game of chance license when operating games that require players to give you money (or other items of value) to play. Learn more about licensing requirements in your state by visiting the Small Business Administration’s reference to state licenses and permits .

If you sell food, you will also need licensing from your local health department, which will require your business to pass regular health inspections. These inspections will check for compliance with local health laws, typically related to prevention of food contamination. For more information about local licenses and permits, check with your city or county clerk’s office, or get help from one of the local associations listed in the SBA’s directory of local business resources .

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses .

Music Licensing

In order to play music in a business setting, permission must be acquired from the composer or license holder. Typically, you can acquire a blanket license that allows you to play music owned by a large catalog of artists and recording studios. Such licenses can be obtained from performance rights organizations, such as ASCAP or BMI.

Certificate of Occupancy

An arcade is always run out of a physical location, and as such typically requires a Certificate of Occupancy (CO). The CO confirms that all building codes, zoning laws and government regulations have been met.

If you plan to lease a location:

• It is generally the landlord’s responsibility to obtain a CO.
• Before leasing, confirm that your landlord has a CO that is applicable to an arcade, or can get one before you are scheduled to open.
• After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended that you include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.

If you plan to purchase or build a location:

• You will be responsible for acquiring a valid CO from a local government authority.
• Review all building codes and zoning requirements for your business location, to ensure your arcade will be in compliance and able to obtain a CO.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

FInd out what types of insurance your Arcade needs and how much it will cost you by reading our guide Business Insurance for Arcade.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market an arcade

While it is important to market your arcade through traditional channels like print, television and radio, the very nature of the arcade business type invites more creative approaches. Because customers come to arcades for a social gaming opportunity, it’s vital to have a strong presence on social media. This helps you foster good word of mouth by providing a central location (i.e. your Facebook page, Twitter/Instagram accounts, etc.) for customers to share their experiences.

You can also easily target ads to your demographic by advertising in other youthful entertainment venues, like malls or skating rinks. Finally, you may want to offer your regular customers discounts and prizes for repeat visits or bringing friends.

How to keep customers coming back

One strategy that fits arcades well is the “happy hour” concept. Whether you serve food and beverages or not, having a set time each day where customers can play games at a discount can generate business during slow hours, or build up crowds leading into or out of peak periods. You can also throw theme parties like an “80s night” to capitalize on the nostalgic factor of arcade gaming, or cross-promote with “Comic Con” type events. Also, keep in mind that an arcade is by definition a niche attraction, which usually helps develop repeat customers.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business .

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

• All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
• Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
• Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .

Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

Is this Business Right For You?

Obviously, you should be a big fan of arcade games. This business includes the purchasing, maintenance and advertising of arcade games — and you’ll be surrounded by games all day, every day — so a passion for gaming is vital. You must also be a people person, as the job involves frequent interaction with customers. Also, if you’re handy enough to repair and restore games yourself, this is an environment where these skills can save you money.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at an arcade?

One of the most important daily activities at an arcade is inspection and upkeep of machines. Nothing is more disappointing to your customers than games being out of order, so it’s important to repair malfunctioning units immediately. There’s also quite a bit of cleaning to do, both regarding your games and the arcade itself. You’ll also need to frequently think about buying new machines, whether you get them from the manufacturer, or second-hand through eBay/Craigslist, or from other arcades. Finally, you should spend some time each day considering marketing strategies to help your arcade stand out from the competition.

What are some skills and experiences that will help you build a successful arcade?

As previously mentioned, an ability to tinker with and repair your machines would be a tremendous help with your daily operations. General business knowledge can help with licensing requirements, and also with keeping your arcade profitable. Developing connections within the arcade industry is valuable as well, as this could enable you to get better deals on games. Finally, it’s smart to keep an eye on the gaming industry at large, which helps ensure you’re always offering experiences that your customers can’t find at home.

What is the growth potential for an arcade?

Your growth potential will be determined by your game selection and client base. For example, one study estimates that you can net an average of around $200 per game, per week. However, complex modern games can cost nearly $10,000 each, so it can take almost a full year to recoup your expenses on a new game. Still, considering most machines are investments that will be in your arcade for years to come, each new purchase has the potential to be quite lucrative.

TRUiC's YouTube Channel

For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe to view later.

Take the Next Step

Find a business mentor.

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

How and when to build a team

The arcade is not a business type that lends itself to dramatic expansion. A successful arcade might eventually open additional locations and start a chain, but a single location will only require a small crew to operate. The main catalyst for building a bigger team would be if you added a previously unavailable service to your arcade, such as adding on a restaurant or bar, which requires employees with different skill sets.

Read our arcade hiring guide to learn about the different roles an arcade typically fills, how much to budget for employee salaries, and how to build your team exactly how you want it.

Useful Links

Truic resources.

• TRUiC's Arcade Hiring Guide
• TRUiC's Arcade Purchasing Guide

Industry Opportunities

• American Amusement Machine Association
• The Video Game & Arcade Preservation Society
• Explore more Entertaintment based Business Ideas

Real World Examples

• Business profile focusing on multiple businesses
• Pinball Pete’s - Michigan-based pinball/arcade center

Further Reading

• Amusement Consulting & Attractions

Additional Sources

• Starting an arcade of your own
• The Arcade Is Back, Now With Beer
• Average Arcade Revenue and Budget
• Starting A Commercial Arcade

Entrepreneur Interviews

Read Interview

Have a Question? Leave a Comment!

Get instant access to detailed competitive research, SWOT analysis, buyer personas, growth opportunities and more for any product or business at the push of a button, so that you can focus more on strategy and execution.

Table of contents, a comprehensive guide on starting your own arcade business.

• 3 April, 2024

Starting an Arcade Business: A Comprehensive Guide

If you’re passionate about gaming and want to turn your love for arcade games into a business, starting an arcade can be an exciting venture. However, it’s important to approach it with careful planning and preparation. This comprehensive guide will walk you through the essential steps to get your arcade business up and running successfully.

The Importance of a Business Plan

Before diving headfirst into your arcade business, it’s crucial to create a business plan . A well-crafted business plan serves as a roadmap for your arcade, outlining your goals, financial projections, marketing strategies, and more. It helps you identify potential challenges and opportunities, and provides a clear vision for your business.

Your business plan should include information about your target audience, competition analysis, marketing strategies, and financial projections. It’s also important to define your arcade’s unique selling proposition (USP) to differentiate yourself from competitors and attract customers. A comprehensive business plan will not only guide you throughout the startup phase but also serve as a valuable document when seeking funding or partners.

Navigating the Permit Process

Navigating the permit process is a crucial step when starting an arcade. It involves obtaining the necessary licenses, permits, and approvals to operate legally and ensure the safety and enjoyment of your customers. The specific permits required may vary depending on your location, so it’s important to research and comply with local, state, and federal requirements.

Permits you may need to consider include:

• Business licenses: Obtain the necessary licenses from your local government to legally operate your arcade.
• Zoning permits: Ensure that your chosen location is zoned for commercial use and entertainment businesses.
• Health and safety permits: Comply with health and safety regulations by obtaining permits related to fire safety, building codes, and sanitation.
• Alcohol permits (if applicable): If you plan to serve alcohol in your arcade, you’ll need to obtain the required licenses and permits.

Working with local authorities and consulting with an attorney who specializes in business permits can help ensure that you follow all the necessary steps and obtain the appropriate permits for your arcade.

By prioritizing the creation of a solid business plan and successfully navigating the permit process, you’ll establish a strong foundation for your arcade business. These initial steps will help you define your vision, understand the legal requirements, and position yourself for success in the competitive arcade industry.

Choosing the Right Location

When starting an arcade business, choosing the right location is crucial for attracting a steady flow of customers. The location of your arcade can significantly impact its success. Consider the following factors when selecting a location for your arcade:

Factors to Consider for Location Selection

Foot Traffic : Look for bustling downtown areas, shopping centers, cinemas, places of residence where people gather, and famous tourist sites to ensure a good customer flow. A location with high foot traffic increases the visibility of your arcade and attracts potential customers ( Neofuns ).

Target Market : Identify your target market and choose a location that aligns with their demographics and preferences. For example, if your target market is families, consider a location near residential areas or entertainment districts that are easily accessible for families ( Betson ).

Competition : Research the presence of existing arcades in the area. While competition can indicate demand, it’s essential to choose a location where you can differentiate your arcade from competitors. Make sure there is potential for your arcade to stand out and offer a unique experience ( Betson ).

Accessibility and Parking : Ensure that the location is easily accessible by public transportation and has ample parking space. Convenience plays a crucial role in attracting customers, as they should be able to reach your arcade without difficulty.

Size and Layout : Consider the size and layout of the space. Ensure that it is large enough to accommodate the desired number of arcade machines and other attractions. An open and well-organized layout allows for smooth customer flow and enhances the overall gaming experience.

Promoting Your Arcade for Maximum Foot Traffic

In addition to choosing the right location, it’s essential to promote your arcade to maximize foot traffic. Here are some strategies to consider:

Leaflets and Merchants : Hand out leaflets and collaborate with nearby merchants to organize joint promotional activities. This helps spread the word about your arcade and attract potential customers ( Neofuns ).

Online Presence : Register your arcade on well-known merchant review websites like Yelp and create a strong online presence on social media platforms such as Facebook, Twitter, LinkedIn, and YouTube. Utilize these platforms to share updates, engage with customers, and promote special offers or events ( Neofuns ).

YouTube Influencers : Consider partnering with popular YouTube influencers who have a large number of gaming enthusiasts as followers. Their endorsement and promotion of your arcade can significantly increase brand popularity and attract a wider audience ( Neofuns ).

Events and Tournaments : Organize gaming tournaments, special events, and theme nights to create a vibrant and engaging experience for your customers. Collaborate with local gaming communities or host charity events to attract a diverse range of gamers and increase foot traffic.

By carefully considering location factors and implementing effective promotional strategies, you can maximize foot traffic to your arcade and create a thriving gaming destination. Remember to continuously evaluate and adjust your promotions based on customer feedback and market trends to ensure ongoing success.

Selecting the Right Mix of Games

When starting an arcade business, selecting the right mix of games is crucial for attracting and retaining customers. Offering a diverse range of arcade games helps cater to the varied interests of gamers and ensures a memorable experience. In this section, we will explore different types of arcade games and discuss how to allocate space based on game categories.

Understanding Different Types of Arcade Games

Arcade games come in various types, each offering a unique gaming experience. Understanding these types will help you curate a collection that appeals to a wide audience. Some common types of arcade games include:

Video Games : These are the traditional arcade games that involve digital graphics and gameplay. They range from classic titles to new releases, and their popularity often depends on current gaming trends. Offering a mix of both nostalgic classics and the latest releases can attract a broader range of gamers.

Redemption Games : Redemption games are designed to reward players with tickets or prizes based on their performance. These games often involve skill-based challenges or simple luck-based mechanics. Including redemption games can appeal to a wider audience, including families and younger players.

Merchandisers : Merchandisers are arcade games that offer the chance to win physical prizes or toys. Players manipulate a mechanical arm or claw to grab items. These games create a sense of excitement and anticipation, making them a popular choice among players of all ages.

By providing a diverse mix of video games, redemption games, and merchandisers, you can cater to a broad range of gaming preferences and maximize customer engagement.

Allocating Space Based on Game Categories

Once you have a clear understanding of the types of arcade games you want to include, it’s important to allocate space effectively. Consider the following factors when determining the space for each category:

Popularity and Demand : Allocate more space to game categories that are highly popular and in-demand among your target audience. For example, if classic video games are consistently sought after, dedicate a significant portion of your arcade floor to them.

Variety and Balance : Ensure a balanced mix of game categories to cater to different gaming preferences. Avoid overcrowding a single category and aim for a diverse selection that offers something for everyone. This variety will keep customers engaged and encourage them to spend more time and money in your arcade.

Physical Requirements : Consider the physical size and layout of each game when allocating space. Some games, such as racing simulators or virtual reality (VR) setups, may require more space due to their larger equipment or player movement requirements.

Traffic Flow : Design your arcade floor plan in a way that optimizes traffic flow. Place popular games strategically to create focal points and guide customers through the arcade. This can help maximize foot traffic and ensure that all game categories receive adequate attention.

By carefully allocating space based on game categories and considering factors such as popularity, variety, physical requirements, and traffic flow, you can create a well-balanced arcade environment that appeals to a wide range of gamers.

Remember, regularly updating your game selection with new releases and monitoring player preferences can help you stay ahead of the competition and maintain a fresh and exciting arcade experience.

Researching the Competition

Before diving into starting your own arcade business, it is important to thoroughly research the competition in the industry. This research will help you identify their strengths, weaknesses, and opportunities, ultimately guiding you in creating a unique arcade experience that stands out from the competition.

Identifying Strengths, Weaknesses, and Opportunities

Analyzing your competitors allows you to gain insights into what makes them successful and what areas they may be lacking in. By identifying their strengths, you can determine what aspects of their business you admire and may want to incorporate into your own arcade. On the other hand, recognizing their weaknesses presents an opportunity for you to offer a better experience or fill a gap in the market.

Consider the following factors when researching your competition:

Game Selection: Take note of the types of games and machines they offer. Are there any popular or trending games that they are missing? This could be an opportunity to attract customers who are seeking those specific games.

Customer Experience: Pay attention to how your competitors engage with their customers. Do they have friendly and knowledgeable staff? Are they incorporating any unique features or promotions to enhance the customer experience? These insights can help you refine your own arcade’s customer service and experience.

Pricing and Promotions: Examine the pricing structure and promotions of your competitors. Are they offering any discounts, loyalty programs, or special events? Understanding their pricing strategy can help you optimize your own pricing and promotions to remain competitive and attract customers.

Location and Target Market: Consider the locations of your competitors’ arcades. Are they targeting a specific demographic or neighborhood? Assess whether there are any untapped areas or niches that you can cater to.

Creating a Unique Arcade Experience

One of the key aspects of standing out in the arcade business is creating a unique experience for your customers. Use the insights gained from researching your competition to craft an arcade that offers something different and memorable.

Consider the following strategies to create a unique arcade experience:

Themed Events and Tournaments: Host themed nights or tournaments that cater to specific gaming communities or eras, such as ’80s nights or cosplay parties. Collaborate with other businesses or local organizations to create immersive and engaging events that attract a diverse group of people.

Loyalty Programs and Rewards: Implement a loyalty program to incentivize customers to return and engage with your arcade. Offer rewards, such as free game credits or exclusive access to special events, to build a loyal customer base.

High-Impact Visuals: Enhance the visual appeal of your arcade with captivating artwork, lighting, and aesthetics. Create a vibrant and nostalgic atmosphere that immerses customers in the gaming experience.

Online Presence and Social Media: Establish a strong online presence by utilizing search engine optimization (SEO) techniques and maintaining an updated website with news on events and promotions. Leverage social media platforms to engage with your target audience, share updates, and foster connections with gamers.

By thoroughly researching the competition and creating a unique arcade experience, you can position your business as a standout destination for gaming enthusiasts. Continuously monitor the industry trends and adapt your offerings to stay ahead of the competition, ensuring that your arcade remains a sought-after destination for gamers of all ages.

Financial Planning for Profitability

When starting an arcade business, careful financial planning is essential to ensure profitability and long-term success. This section will cover two crucial aspects of financial planning: startup costs and budgeting, as well as revenue potential and cost management.

Startup Costs and Budgeting

Opening an arcade requires an initial investment to cover various expenses. Startup costs can range between $10,000 to $50,000, depending on the size and scope of the arcade Growthink . It’s important to consider the following factors when estimating your startup costs:

Leasing a Space : Renting a suitable location for your arcade is one of the major expenses. Consider the size, location, and foot traffic potential when selecting the right space.

Arcade Game Software : Acquiring the necessary arcade game software is crucial. Research different suppliers and budget for the cost of purchasing or licensing the games.

Equipment and Furnishings : You’ll need arcade game machines, ticket redemption systems, furniture, and other equipment to set up your arcade. Include these costs in your budget.

Marketing and Promotion : Allocate funds for marketing activities to promote your arcade and attract customers. This can include online advertising, social media campaigns, and local promotions.

Staffing : If you plan to have employees, budget for salaries, training, and employee benefits.

Other Miscellaneous Costs : Don’t forget to account for utilities, insurance, licenses, permits, and any other miscellaneous expenses that may arise.

By thoroughly estimating your startup costs and creating a detailed budget, you will have a better understanding of the financial requirements and be prepared for the initial stages of your arcade business.

Revenue Potential and Cost Management

Arcades generate revenue primarily by charging customers to play games. However, additional revenue streams can include food and drink sales, hosting events, renting out space to other businesses, and selling advertising space Growthink .

To maximize your revenue potential, consider the following strategies:

Pricing and Payment Options : Determine your pricing structure, whether it’s per game, per hour, or a combination. Offering different payment options, such as tokens or swipe cards, can enhance the customer experience and encourage repeat visits.

Food and Drink Sales : Consider offering a selection of snacks, beverages, and even meals to increase revenue. Partnering with local vendors or setting up a small café within your arcade can offer additional income opportunities.

Events and Parties : Host special events, birthday parties, or corporate gatherings in your arcade. Providing packages and group discounts can attract more customers and generate higher revenues.

Partnerships and Sponsorships : Explore partnerships with local businesses or organizations for mutual promotion. This can include cross-promotions, sponsorships, or hosting joint events.

In terms of cost management, it’s crucial to keep track of your ongoing expenses and find ways to optimize your operations. This includes monitoring rent, utilities, staff salaries, marketing expenses, and supplies Growthink . Regularly reviewing your financial statements and adjusting your budget accordingly will help you maintain profitability and make informed decisions.

By carefully planning your startup costs, creating a realistic budget, and implementing effective cost management strategies, you can lay a solid foundation for a financially successful arcade business. This will help you navigate the challenges and ensure the long-term viability of your venture.

Marketing Strategies for an Arcade Business

To ensure the success of your arcade business, effective marketing strategies are essential. By crafting a vibrant brand identity and engaging with the local community through events, you can attract a diverse audience of gaming enthusiasts.

Crafting a Vibrant Brand Identity

Marketing an arcade business requires a blend of nostalgia and cutting-edge appeal to attract a diverse audience of gaming aficionados. Crafting a brand with vibrant visuals and a magnetic personality is crucial in standing out in the competitive entertainment market.

When developing your brand identity, consider incorporating elements that evoke a sense of nostalgia, such as retro-inspired logos, graphics, and signage. This helps create a connection with gamers who have fond memories of arcade gaming in the past. At the same time, infuse your brand with a modern and contemporary vibe to appeal to younger generations.

Consistency in branding is key. Ensure that your brand identity is reflected across all touchpoints, including your website, social media profiles, advertising materials, and physical space. This consistency helps create a cohesive and recognizable image for your arcade business.

Engaging the Local Community and Hosting Events

One of the most effective ways to market your arcade business is by engaging with the local community and hosting events. Immersive themed nights, tournaments, loyalty programs, and high-impact visuals can help build a loyal customer base.

Consider organizing tournaments and gaming competitions to attract competitive gamers who thrive on the thrill of competition. These events not only drive foot traffic to your arcade but also create a sense of community among players. Offering prizes and incentives for winners can further enhance the appeal of these events.

To foster connections and keep customers returning, host social gatherings centered around iconic games or gaming themes. Themed nights like ’80s nights or cosplay parties can attract diverse groups of people, including those who may not typically visit arcades. Collaborative events with other businesses, such as partnering with local restaurants or hosting joint promotions, can also help expand your customer base and provide additional value.

Encourage satisfied gamers to share their experiences online through social media platforms. Word-of-mouth marketing is powerful in the gaming community, and positive reviews and testimonials can attract new visitors to your arcade. Leverage social media platforms to stay connected with your audience, share updates on events and promotions, and engage in conversations related to gaming.

By crafting a vibrant brand identity and engaging with the local community through events, you can create a buzz around your arcade business. Remember to utilize SEO , maintain an updated website with news on events and promotions, and encourage online reviews and testimonials to further enhance your marketing efforts. With these strategies in place, you can attract a loyal customer base and establish your arcade as a go-to destination for gaming enthusiasts.

Online Presence and Digital Marketing

In today’s digital age, establishing a strong online presence and implementing effective digital marketing strategies are crucial for the success of your arcade business. Utilizing search engine optimization (SEO) techniques and leveraging social media platforms can help you reach a wider audience and maximize your online visibility.

Utilizing SEO and Social Media Platforms

To ensure that your arcade business ranks well in search engine results and attracts organic traffic, it’s important to implement SEO strategies. This involves optimizing your website’s content with relevant keywords, meta tags, and descriptions. Conduct keyword research to identify popular search terms related to arcades, such as “arcade games,” “retro gaming,” or “family entertainment center.” Incorporate these keywords naturally throughout your website to increase its visibility on search engines.

In addition to optimizing your website, it’s essential to establish a strong presence on social media platforms. Create profiles for your arcade on popular platforms such as Facebook, Twitter, LinkedIn, and YouTube. Regularly update these profiles with engaging content, including announcements about upcoming events, promotions, and special offers. Interact with your audience by responding to comments, messages, and reviews to build a positive online reputation.

Encouraging customer reviews on well-known merchant review websites, such as Yelp, can also enhance your online presence. Positive reviews from satisfied customers can attract new visitors to your arcade and build credibility. Make it easy for customers to leave reviews by providing links to review platforms on your website and social media profiles.

Encouraging Reviews and Engaging with Customers

Engaging with your customers is crucial for building strong relationships and fostering loyalty. Encourage customers to leave reviews and testimonials about their experiences at your arcade. Positive reviews can serve as powerful social proof and attract new customers. Respond to both positive and negative reviews in a professional and timely manner, addressing any concerns and showing that you value customer feedback.

In addition to reviews, consider leveraging email marketing to engage with your audience. Collect email addresses from customers who visit your arcade and offer them the opportunity to subscribe to a newsletter. Use email marketing campaigns to share updates about upcoming events, promotions, and new game additions. Personalize your emails to make customers feel valued and appreciated.

By utilizing SEO techniques, maintaining an active presence on social media, and encouraging reviews and customer engagement, you can effectively promote your arcade business and attract a wider audience. Remember to regularly evaluate the performance of your digital marketing efforts and adjust your strategies accordingly to ensure continued success.

Building and Maintaining Arcade Machines

When starting an arcade business, it’s essential to understand the components and functionality of arcade machines. These machines are the heart of your arcade and play a crucial role in providing an enjoyable gaming experience for your customers.

Components and Functionality of Arcade Machines

Arcade machines consist of various components that work together to deliver immersive gameplay. Understanding these components is vital for building and maintaining arcade machines. Here are the key components:

Power Supply : Arcade games consume a significant amount of power, making a properly working power supply essential. The power supply handles different capacities and includes circuit boards, transformers, and capacitors for regulation and stabilization. It ensures that the machine receives a stable power source to operate reliably and efficiently ( Game Exchange ).

Control Panel : The control panel of an arcade cabinet is the primary interface for player input. It typically includes components such as joysticks, buttons, trackballs, spinner controls, steering wheels, or pedals. These controls allow players to interact with the game and navigate through the gameplay experience. Control panels are usually hidden from the player’s view and attached to the back of the cabinet ( Game Exchange ).

Monitor : The monitor is a vital component of an arcade machine as it displays the graphics and visual elements of the game. Most arcade games come equipped with one monitor for players to view the game’s graphics. Some models may have integrated monitors, multiple monitors, or control panels. High-quality monitors ensure crisp and vibrant visuals, enhancing the overall gaming experience ( Game Exchange ).

Marquee : The marquee serves as the main housing for an arcade game, protecting the monitor and displaying the game’s name and art to attract players. It is often made of transparent plastic to allow the graphics displayed on the monitor to show through. The marquee adds an aesthetic appeal to the arcade machine and helps in branding and game recognition ( Game Exchange ).

Coin Mechanism : Arcade machines usually require players to insert a coin to play the game. The coin mechanism includes a bill validator that accepts both bills and coins, a coin hopper, and is typically located in front of the cabinet near the bottom. The coin mechanism ensures a seamless and secure process for players to start the game while maintaining revenue for the arcade business ( Game Exchange ).

Choosing Between Traditional and Emulation-Based Machines

When building an arcade machine, you have the option to choose between traditional and emulation-based machines. Consider the following factors when making your decision:

Traditional Arcade Machines : Traditional arcade machines are built with CRT monitors, Jamma boards, and quality arcade parts. These machines offer an authentic arcade gaming experience and are often preferred by enthusiasts and collectors. They typically require more maintenance and may be more expensive to build or acquire. However, for those seeking nostalgia and a genuine arcade feel, traditional machines can be an excellent choice.

Emulation-Based Machines : Emulation-based machines utilize a PC or single board computer (SBC) like the Raspberry Pi or Odroid XU4. These machines can emulate thousands of arcade games and old consoles. They offer a cost-effective option for building arcade machines, especially for those on a budget. Single board computers like the Raspberry Pi 3B+ and Odroid XU4 are popular choices for emulation-based machines, providing sufficient processing power and compatibility for a wide range of games ( Quora ).

When building arcade machines, ensure that you have the necessary input devices such as joysticks, buttons, a board or PC to run the games, a visual output device, and speakers. These components are essential for a functional and enjoyable gaming experience ( Quora ). Additionally, developing a game engine for arcade games may require expertise in 3D mathematics, programming, and computer graphics. The engine consists of three main components: Math Engine, Rendering Engine, and Physics Engine, which collectively enable character movement, scene rendering, and other interactions within the game environment ( Quora ).

Understanding the components and functionality of arcade machines is crucial for maintaining and repairing them as needed. Regular maintenance, including cleaning, inspecting, and replacing worn-out parts, will ensure that your arcade machines operate smoothly and provide an optimal gaming experience for your customers.

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How to Start an Arcade Business: An Essential Guide

By alex ryzhkov, arcade bundle.

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Launching an arcade business taps into the growing inclination for nostalgic yet modern entertainment, with the global market for family entertainment centers poised to reach significant growth by 2025. In this blog post, we will guide you through the essential steps to open an arcade center , from crafting a detailed arcade business plan to the strategic marketing and operational tactics that will cement your place in this lucrative industry. Whether you are looking at classic arcade games or cutting-edge virtual reality experiences, this checklist will ensure you cover all bases to successfully launch and sustain your arcade business.

• Develop business plan.
• Forecast finances.
• Acquire funding.
• Select location.
• Obtain licenses.
• Procure games.
• Hire staff.
• Plan marketing.
• Setup operations.

9-Steps To Start a Business

Before launching your arcade center business, it's essential to meticulously plan and prepare. Each step of the process is crucial not only for the successful opening of your business but also for its long-term sustainability and growth. Here is a checklist to guide you through the necessary steps.

Business Plan Development

Developing a comprehensive arcade business plan is the first critical step to ensure the success of launching an arcade business. This detailed document should systematically outline all aspects of your arcade center, including the business concept, target market, and competitive positioning. Moreover, a robust analysis of marketing strategies and operational structures is imperative. Financial projections are not merely estimations; they form the backbone of your arcade center funding strategies and expectations of profitability.

To start, define the unique selling proposition of your arcade center. Will it prioritize classic arcade games, focus on cutting-edge virtual reality experiences, or a balanced mix of both? Understanding this will guide the selection of your game inventory and help in crafting targeted marketing messages.

Identifying your target market goes beyond demographics. Analyze customer preferences, potential foot traffic, and spending habits in various locations to pinpoint where your arcade center could thrive. This analysis directly ties into choosing the best location for an arcade business .

Conduct a thorough arcade business competitive analysis . Evaluate direct competitors such as other arcade centers, as well as indirect competitors like movie theaters or any leisure activities vying for the same discretionary spending. Highlight your center's competitive edges, such as unique games, superior loyalty programs, or exceptional customer service.

Tips for Effective Financial Forecasting

• Utilize historical data from similar businesses to estimate initial costs and revenue potential.
• Consider both best-case and worst-case scenarios in your financial models to prepare for unpredictability.
• Keep a close eye on cash flow management to sustain operations before reaching the break-even point.

Expand on your marketing strategy by detailing how you intend to attract and retain customers. Will you employ online marketing, local advertisements, or partnerships with schools and organizations? Each approach should aim to build a strong brand presence within the community and pull in the crowds.

Finally, outline your operational structure. Discuss the internal setup, including staff hiring , training procedures, maintenance of gaming equipment, and customer service policies. An operational strategy that prioritizes efficiency and customer satisfaction is crucial for the ongoing success and scalability of the arcade center.

Your business plan is not only a roadmap for starting and managing your arcade center but also a vital document for arcade center funding acquisition. It must convincingly project the trajectory of growth and arcade business profitability to attract investors and secure loans. Hence, this initial document should be meticulously researched and elegantly composed to ensure it aligns with both investor expectations and market realities.

Financial Forecasting

Financial forecasting forms a pivotal aspect of the process when you plan to open an arcade center . Creating a comprehensive financial model will guide you through the projected income, expenses, and cash flow, thereby providing a clearer picture of the capital requirements. Such a model is essential not only for maintaining a healthy financial status but also for securing arcade center funding .

A robust financial forecast model is instrumental in conducting a break-even analysis , which identifies the point at which your arcade center will start generating profit. This analysis highlights the arcade business profitability , enabling better insights into when and how you can expect returns on your investments.

Key Tips for Efficient Financial Forecasting

• Use realistic revenue assumptions based on market trends and comparable arcade investment opportunities .
• Include different scenarios in your forecasts to cover various operational contingencies or shifts in market dynamics.
• Plan for unexpected expenses to ensure your financial model remains resilient against unforeseen costs.

The financial forecast should not only focus on the initial set-up costs but also on ongoing expenses like rent, utilities, arcade game procurement , and salaries. Incorporating ongoing expenses correctly will aid in effective arcade center cash flow management .

Lastly, detailed financial forecasting assists in communicating the financial viability of your business to potential investors, critical for how to fund an arcade center . This level of detail and financial transparency significantly augments your credibility and can smooth the process of arcade center permit acquisition and other regulatory approvals.

Funding Acquisition

Launching an arcade business requires significant upfront investment. To navigate through this crucial phase, exploring diverse funding sources is paramount. Options include traditional bank loans, engaging investors, or leveraging modern crowdfunding platforms. Each funding avenue offers distinct advantages and necessitates a tailored approach. For a successful pitch, it's essential to present detailed financial statements and a compelling pitch deck that highlights the Arcade Center's unique selling proposition and its potential for high returns.

Bank loans might be the primary choice for those who have strong personal credit or collateral. They typically offer large sums which could cover both initial setup and operational costs. However, the process involves rigorous financial checks and lengthy approval times. On the other hand, investors such as venture capitalists or angel investors bring not only funds but valuable experience and networks, though they may demand a share of business equity.

Crowdfunding can tap into the enthusiasm of future customers and arcade enthusiasts, turning them into initial funders. This method not only raises capital but also validates the business concept amongst potential patrons. However, a successful crowdfunding campaign requires an attractive rewards system and effective digital marketing strategies to reach a wide audience.

Key Tips for Effective Funding Acquisition

• Prepare meticulously: Ensure your business plan and financial projections are flawless. Investors or lenders should get a clear picture of your market analysis, growth potential, and detailed budget allocations.
• Emphasize uniqueness: Highlight what sets your Arcade Center apart from competitors. Whether it's exclusive games, state-of-the-art VR experiences, or unique loyalty programs, make sure these elements are front and center in your pitch.
• Engage actively: Don't just wait for investors or lenders to find you. Network at industry events, join online gaming forums, and engage directly with potential financial partners to increase your visibility and chances of securing funding.

To optimize chances of funding approval, it's crucial to display a thorough understanding of arcade center operations including cash flow management and competitive analysis. Additionally, demonstrating clear paths to profitability through well-thought-out arcade operational strategies can significantly enhance investor confidence.

In summary, securing adequate funding is a multifaceted process that requires a strong foundation in both financial preparedness and strategic outreach. With the right approach, obtaining the necessary capital to open an arcade center can be a well-structured and successful endeavor.

Location Selection

Choosing a strategic location is pivotal when you plan to open an arcade center . The success of your arcade business largely hinges on its accessibility and the volume of potential customers it can attract.

When scouting for the best location for an arcade business, focus on areas characterized by high foot traffic. Popular choices include shopping malls, bustling city streets, or locales close to schools and family-oriented community centers. Each of these areas guarantees a steady influx of a diverse demographic keen on entertainment options.

However, the decision doesn't stop at foot traffic. Several other factors must be weighed to ensure that the location aligns with your business objectives and financial parameters. Here are key considerations:

• Rent Expenses: A balance must be maintained between a desirable spot and affordable rent. High traffic areas often come with high rental costs.
• Space Size: The area must be sufficient to house various game machines and provide comfortable moving space for guests.
• Accessibility: Ensure the arcade is easily reachable via public transport or has ample parking if in a suburban area.
• Demographic Appeal: The target audience of your arcade center should resonate with the demographics of the area. For instance, areas near schools might benefit from more family-friendly and redemption games.

Expert Tips for Choosing an Ideal Arcade Location

• Conduct a thorough competitive analysis to determine if there are similar businesses nearby that could impact your traffic.
• Consult with a real estate agent who specializes in commercial properties to find hidden gems and get better rental deals.
• Consider future growth and expansion possibilities when selecting a space, ensuring it can adapt as your business scales.

Securing a prime location isn’t just about placing your arcade center in a busy area; it’s about integrating strategic thinking with detailed analytics like arcade business competitive analysis and financial forecasting for arcades . This analytical approach will guide you in making a decision that not only increases foot traffic but also optimizes your operational costs and enhances arcade business profitability .

Licensing And Permits

Securing the right licenses and permits is a crucible step in launching an arcade business . Compliance with local, state, and federal regulations not only legitimizes your enterprise but also shields it from potential legal complications. Different regions have varied requirements, thus a thorough investigation and understanding of these are imperative for anyone trying to open an arcade center .

Initially, you'll need to procure a general business license, which allows you to operate a business within your locality. Depending on your location, this might involve applications to city or county offices. Furthermore, because an arcade centers on entertainment and public engagement, additional permits related to health, safety, and entertainment may be required. These can include fire department permits, health department certifications, and special amusement permits.

For arcades that offer food and beverages, health and safety certifications become particularly vital. They ensure that your establishment adheres to the health codes required to serve food to the public. Each of these certifications often requires an inspection of the premises, so ensure your arcade center is up to standard before inspectors arrive.

Key Tips for Streamlining Your Licensing Process

• Start early: Licensing can be a lengthy process, so begin as soon as your location is secured.
• Maintain a checklist: Keep track of all required permits and their renewal dates to ensure continuous compliance.
• Seek professional help: Consider consulting a business attorney who specializes in arcade business profitability and regulatory needs to navigate complex legal requirements.

Among the special licenses, those interested in incorporating more technologically advanced games, like virtual reality setups, might need to look into additional tech-related permits. This is on top of any music broadcasting licenses if your arcade plans to play music publicly.

Lastly, understanding and managing the continuous need for legal compliance is an ongoing requirement that will benefit from regular reviews and updates. This proactive approach in obtaining and maintaining your licenses will not only keep your arcade operational strategies effective but also enhance your overall arcade investment opportunities .

Game Procurement

Securing the right mix of arcade games is pivotal for the success of an Arcade Center. It's essential to source a variety of both classic and modern games, ensuring each selection can draw and engage a diverse crowd. This involves not only traditional arcade games but also incorporating advanced VR setups and popular redemption machines.

When procuring games for an Arcade Center, focus on a blend that caters to different demographics and interests. For example, classic arcade games can appeal to nostalgia seekers, while modern games and VR experiences attract a younger, tech-savvy crowd. Moreover, redemption games where players can win prizes are especially popular among families and younger children.

Essential Tips for Successful Game Procurement

• Research Player Preferences: Conduct surveys or explore community feedback to understand the types and themes of games that are most likely to attract your target audience.
• Test Before Buying: Whenever possible, test games to ensure their reliability and fun factor before making a purchase.
• Negotiate with Suppliers: Don't hesitate to negotiate prices and warranty terms with game suppliers to get the best possible deals.

To foster interest and keep patrons returning, it’s critical to routinely evaluate and update the Arcade Center's game offerings. Staying updated with the latest trends in gaming technology and popular culture can guide these updates. Consider attending trade shows or connecting with other arcade operators to stay informed about new and upcoming games.

Finally, remember that the arcade games procurement process is an ongoing element of managing an Arcade Center. It's not just about making an initial investment but continuously enhancing the game selection to keep up with changing trends and customer expectations.

Staff Hiring

Effective staffing is paramount in launching an arcade business. The workforce you select can directly affect the efficiency of operation and the quality of customer experience in your arcade center. Essential roles include game technicians, known for their technical acumen in maintaining and repairing arcade games, and customer service representatives, who interact directly with patrons. Additionally, managerial staff, who oversee the operations and ensure the business runs smoothly, are crucial.

Finding the right mix of enthusiasm, customer orientation, and technical skill is essential for these roles. Employees must be comfortable with the high-tech aspects of modern arcades , especially the cutting-edge VR equipment that may require specific knowledge and handling skills.

Key Tips for Hiring Arcade Center Staff

• Utilize Specialty Job Boards: Platforms specific to tech and entertainment industries can help attract candidates with the right technical background and customer service skills.
• Emphasize Continuous Training: Arcade technology evolves rapidly. Implement ongoing training programs to keep your staff up-to-date with the latest game and VR technology.
• Focus on Soft Skills: During the hiring process, prioritize candidates who demonstrate strong interpersonal skills and a genuine enthusiasm for gaming and customer service.

Moreover, consider the operational demands of your arcade center when determining the size and structure of your team. Effective workforce management, including the scheduling of shifts and handling of peak times, will ensure that the arcade operates efficiently and maintains a high level of customer satisfaction. Ultimately, the team you assemble will be instrumental in defining the atmosphere and success of your arcade business.

Marketing Strategy

Developing a robust marketing plan for your Arcade Center is crucial to attract and retain customers. This plan should encompass several key activities designed to maximize your visibility and appeal from the onset.

To generate excitement before the center opens, consider launching a pre-launch buzz campaign. Utilize social media platforms, local media outlets, and community events to broadcast the unique experiences your arcade will offer. Leverage teasers about new games, special VR experiences, and the aesthetics of your arcade to create anticipation and curiosity.

The grand opening event should be a spectacle that draws attention and guests. Offer exclusive play sessions, tournaments with prizes, or guest appearances from popular figures in the gaming community. Ensure the event highlights the special features of your arcade, encouraging attendees to spread the word.

Continual engagement on social media helps keep the conversation going. Regular updates, behind-the-scenes content, player leaderboards, and special game nights can keep your audience engaged and encourage repeat visits. Consider platforms popular with gaming communities such as Instagram, Twitter, and Twitch.

Forming local partnerships can enhance your network and provide mutual benefits. Collaborate with nearby restaurants, schools, and community centers to offer promotions that benefit both parties. Such collaborations can increase foot traffic and provide exclusive offers that attract a broader audience.

Ongoing promotions are vital for sustained interest and customer loyalty. Implement loyalty programs, discount days, birthday promotions, and seasonal events to keep attracting diverse demographics throughout the year.

Expert Tips for Enhancing Your Arcade Center's Marketing Impact

• Analyze Your Audience: Understand who frequents arcade centers and tailor your marketing strategies to appeal directly to this demographic, incorporating trends and preferences that resonate.
• Maximize Online Reviews: Encourage satisfied customers to leave positive reviews on platforms like Google and Yelp. High ratings can significantly influence potential customers researching fun local activities.
• Utilize Data-Driven Decisions: Gather data from your promotions and social media engagements to see what works and refine your approaches based on real-time feedback and analytics.

Operational Systems Setup

Setting up operational systems in an arcade center is crucial for ensuring day-to-day activities run smoothly and efficiently. This step involves integrating technology solutions that help manage the complexity of running a lively entertainment venue.

Firstly, a strong Point of Sale (POS) system is non-negotiable. This system will handle transaction processing, including game credits and merchandise sales. It's important to choose a POS that can also manage loyalty programs and promotions, enhancing customer experience and retention.

Another pivotal element is the implementation of an inventory management system . Specifically for arcade centers, this system should be capable of tracking not just typical inventory like food and drinks, but also prizes and redemption items. Accurate inventory tracking helps in maintaining the balance between demand and supply, reducing overhead costs due to overstocking or understocking.

Lastly, implementing regular maintenance schedules for arcade machines is critical. Operational downtime can significantly impact revenue, and thus, having a predetermined schedule for maintenance and quick repairs ensures machines spend more time up and running.

Essential Tips for Effective Arcade Center Operations:

• Integrate your POS system with an online booking platform to facilitate advance game bookings and reduce wait times.
• Use cloud-based inventory management systems for real-time tracking and easier management of multiple suppliers and prize categories.
• Develop a comprehensive training program for staff focusing on troubleshooting common issues with arcade games to minimize downtime.

Efficient operational setups blend state-of-the-art technology with robust management practices, positioning your arcade center as a top choice for family-friendly entertainment.

Starting an arcade center business involves meticulous planning and execution, but by following these nine essential steps, entrepreneurs can lay a strong foundation for a successful venture. From developing a robust business plan to implementing effective operational systems, each step is crucial in crafting a unique and engaging experience that attracts and retains customers. Remember, the key to success in the arcade business is not just about the games offered, but also about creating memorable experiences that resonate with your target audience.

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How to write a business plan for an arcade game room?

Writing a business plan for an arcade game room can be an intimidating task, especially for those just starting.

This in-depth guide is designed to help entrepreneurs like you understand how to create a comprehensive business plan so that you can approach the exercise with method and confidence.

We'll cover: why writing an arcade game room business plan is so important - both when starting up, and when running and growing the business - what information you need to include in your plan, how it should be structured, and what tools you can use to get the job done efficiently.

Let's get started!

In this guide:

Why write a business plan for an arcade game room?

• What information is needed to create a business plan for an arcade game room?
• What goes in the financial forecast for an arcade game room?
• What goes in the written part of an arcade game room business plan?
• What tool can I use to write my arcade game room business plan?

Understanding the document's scope and goals will help you easily grasp its structure and content. Before diving into the specifics of the plan, let's take a moment to explore the key reasons why having an arcade game room business plan is so crucial.

To have a clear roadmap to grow the business

Small businesses rarely experience a constant and predictable environment. Economic cycles go up and down, while the business landscape is mutating constantly with new regulations, technologies, competitors, and consumer behaviours emerging when we least expect it.

In this dynamic context, it's essential to have a clear roadmap for your arcade game room. Otherwise, you are navigating in the dark which is dangerous given that - as a business owner - your capital is at risk.

That's why crafting a well-thought-out business plan is crucial to ensure the long-term success and sustainability of your venture.

To create an effective business plan, you'll need to take a step-by-step approach. First, you'll have to assess your current position (if you're already in business), and then identify where you'd like your arcade game room to be in the next three to five years.

Once you have a clear destination for your arcade game room, you'll focus on three key areas:

• Resources: you'll determine the human, equipment, and capital resources needed to reach your goals successfully.
• Speed: you'll establish the optimal pace at which your business needs to grow if it is to meet its objectives within the desired timeframe.
• Risks: you'll identify and address potential risks you might encounter along the way.

By going through this process regularly, you'll be able to make informed decisions about resource allocation, paving the way for the long-term success of your business.

Need a convincing business plan?

The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.

To anticipate future cash flows

Regularly comparing your actual financial performance to the projections in the financial forecast of your arcade game room's business plan gives you the ability to monitor your business's financial health and make necessary adjustments as needed.

This practice allows you to detect potential financial issues, such as unexpected cash shortfalls before they escalate into major problems. Giving you time to find additional financing or put in place corrective measures.

Additionally, it helps you identify growth opportunities, like excess cash flow that could be allocated to launch new products and services or expand into new markets.

Staying on track with these regular comparisons enables you to make well-informed decisions about the amount of financing your business might require, or the excess cash flow you can expect to generate from your main business activities.

To secure financing

A detailed business plan becomes a crucial tool when seeking financing from banks or investors for your arcade game room.

Investing and lending to small businesses are very risky activities given how fragile they are. Therefore, financiers have to take extra precautions before putting their capital at risk.

At a minimum, financiers will want to ensure that you have a clear roadmap and a solid understanding of your future cash flows (like we just explained above). But they will also want to ensure that your business plan fits the risk/reward profile they seek.

This will off-course vary from bank to bank and investor to investor, but as a rule of thumb. Banks will want to see a conservative financial management style (low risk), and they will use the information in your business plan to assess your borrowing capacity — the level of debt they think your business can comfortably handle — and your ability to repay the loan. This evaluation will determine whether they'll provide credit to your arcade game room and the terms of the agreement.

Whereas investors will carefully analyze your business plan to gauge the potential return on their investment. Their focus lies on evidence indicating your arcade game room's potential for high growth, profitability, and consistent cash flow generation over time.

Now that you recognize the importance of creating a business plan for your arcade game room, let's explore what information is required to create a compelling plan.

Information needed to create a business plan for an arcade game room

Drafting an arcade game room business plan requires research so that you can project sales, investments and cost accurately in your financial forecast, and convince the reader that there is a viable commercial opportunity to be seized.

Below, we'll focus on three critical pieces of information you should gather before starting to write your plan.

Carrying out market research for an arcade game room

Before you begin writing your business plan for an arcade game room, conducting market research is a critical step in ensuring precise and realistic financial projections.

Market research grants you valuable insights into your target customer base, competitors, pricing strategies, and other crucial factors that can impact the success of your business.

In the course of this research, you may stumble upon trends that could impact your arcade game room.

You might find that your target audience could be interested in competitive gaming experiences, such as tournaments or leaderboards. Additionally, you may discover that there could be a potential for virtual reality gaming to be popular in your arcade game room.

Such market trends play a pivotal role in revenue forecasting, as they provide essential data regarding potential customers' spending habits and preferences.

By integrating these findings into your financial projections, you can provide investors with more accurate information, enabling them to make well-informed decisions about investing in your arcade game room.

Developing the marketing plan for an arcade game room

Before delving into your arcade game room business plan, it's imperative to budget for sales and marketing expenses.

To achieve this, a comprehensive sales and marketing plan is essential. This plan should provide an accurate projection of the necessary actions to acquire and retain customers.

Additionally, it will outline the required workforce to carry out these initiatives and the corresponding budget for promotions, advertising, and other marketing endeavours.

By budgeting accordingly, you can ensure that the right resources are allocated to these vital activities, aligning them with the sales and growth objectives outlined in your business plan.

The staffing and capital expenditure requirements of an arcade game room

Whether you are starting or expanding an arcade game room, it is important to have a clear plan for recruitment and capital expenditures (investment in equipment and real estate) in order to ensure the success of the business.

Both the recruitment and investment plans need to be coherent with the timing and level of growth planned in your forecast, and require appropriate funding.

A possible staffing cost that an arcade game room might incur could be hiring employees to run the arcade. This could include a manager to oversee the day to day operations, as well as game attendants to help guests with any questions they might have. Equipment costs could include the cost of the actual arcade games, as well as other necessary items such as chairs, tables and lighting. The cost of maintaining and repairing the arcade machines would also need to be covered. Additionally, the arcade might need to purchase additional supplies such as tokens or tickets.

In order to create a realistic financial forecast, you will also need to consider the other operating expenses associated with running the business on a day-to-day basis (insurance, bookkeeping, etc.). 

Once you have all the necessary information to create a business plan for your arcade game room, it is time to start creating your financial forecast.

What goes into your arcade game room's financial forecast?

The financial forecast of your arcade game room's business plan will enable you to assess the growth, profitability, funding requirements, and cash generation potential of your business in the coming years.

The four key outputs of a financial forecast for a arcade game room are:

• The profit and loss (P&L) statement ,
• The projected balance sheet ,
• The cash flow forecast ,
• And the sources and uses table .

Let's look at each of these in a bit more detail.

The projected P&L statement

Your arcade game room forecasted P&L statement enables the reader of your business plan to get an idea of how much revenue and profits your business is expected to make in the near future.

Ideally, your reader will want to see:

• Growth above the inflation level
• Expanding profit margins
• Positive net profit throughout the plan

Expectations for an established arcade game room will of course be different than for a startup. Existing businesses which have reached their cruising altitude might have slower growth and higher margins than ventures just being started.

The projected balance sheet of your arcade game room

Your arcade game room's forecasted balance sheet enables the reader of your plan to assess your financial structure, working capital, and investment policy.

It is composed of three types of elements: assets, liabilities and equity:

• Assets: represent what the business owns and uses to produce cash flows. It includes resources such as cash, equipment, and accounts receivable (money owed by clients).
• Liabilities: represent funds advanced to the business by lenders and other creditors. It includes items such as accounts payable (money owed to suppliers), taxes due and loans.
• Equity: is the combination of what has been invested by the business owners and the cumulative profits and losses generated by the business to date (which are called retained earnings). Equity is a proxy for the value of the owner's stake in the business.

Your arcade game room's balance sheet will usually be analyzed in conjunction with the other financial statements included in your forecast.

Two key points of focus will be:

• Your arcade game room's liquidity: does your business have sufficient cash and short-term assets to pay what it owes over the next 12 months?
• And its solvency: does your business have the capacity to repay its debt over the medium-term?

The cash flow forecast

A projected cash flow statement for an arcade game room is used to show how much cash the business is generating or consuming.

The cash flow forecast is usually organized by nature to show three key metrics:

• The operating cash flow: do the core business activities generate or consume cash?
• The investing cash flow: how much is the business investing in long-term assets (this is usually compared to the level of fixed assets on the balance sheet to assess whether the business is regularly maintaining and renewing its equipment)?
• The financing cash flow: is the business raising new financing or repaying financiers (debt repayment, dividends)?

As we discussed earlier, cash is king and keeping an eye on future cash flows an imperative for running a successful business. Therefore, you can expect the reader of your arcade game room business plan to pay close attention to your cash flow forecast.

Also, note that it is customary to provide both yearly and monthly cash flow forecasts in a business plan - so that the reader can analyze seasonal variation and ensure the arcade game room is appropriately funded.

The initial financing plan

The initial financing plan - also called a sources and uses table - is an important tool when starting an arcade game room.

It shows where the money needed to set up the business will come from (sources) and how it will be allocated (uses).

Having this table helps understand what costs are involved in setting up the arcade game room, how the risks are distributed between the shareholders and the lenders, and what will be the starting cash position (which needs to be sufficient to sustain operations until the business breaks even).

Now that the financial forecast of an arcade game room business plan is understood, let's focus on what goes into the written part of the plan.

The written part of an arcade game room business plan

The written part of an arcade game room business plan is composed of 7 main sections:

• The executive summary
• The presentation of the company
• The products and services
• The market analysis
• The strategy
• The operations
• The financial plan

Throughout these sections, you will seek to provide the reader with the details and context needed for them to form a view on whether or not your business plan is achievable and your forecast a realistic possibility.

Let's go through the content of each section in more detail!

1. The executive summary

The first section of your arcade game room's business plan is the executive summary which provides, as its name suggests, an enticing summary of your plan which should hook the reader and make them want to know more about your business.

When writing the executive summary, it is important to provide an overview of the business, the market, the key financials, and what you are asking from the reader.

Start with a brief introduction of the business, its name, concept, location, how long it has been in operation, and what makes it unique. Mention any services or products you plan to offer and who you sell to.

Then you should follow with an overview of the addressable market for your arcade game room, current trends, and potential growth opportunities.

You should then include a summary of your key financial figures such as projected revenues, profits, and cash flows.

Finally, you should detail any funding requirements in the ask section.

2. The presentation of the company

The second section in your arcade game room's business plan should focus on the structure and ownership, location, and management team of the company.

The structure and ownership part provides an overview of the legal structure of the business, who the owners are and how much each has invested and owns. If you are seeking financing it is important that the reader gets a clear picture of which legal entity is receiving the funds, and who controls the business.

The location part should give an overview of the premises from which the company is operating, and why that location is of particular interest (catchment area, accessibility, amenities nearby, etc.).

When describing the location of your arcade game room, you might emphasize its proximity to potential customers. Highlight that it could be located in a densely populated area, with plenty of foot traffic, ideal for drawing in customers. You could also point out its potential to be situated in a busy commercial or entertainment district, with access to a wide variety of other activities. Additionally, you could stress its accessibility, as it could be located near public transportation or parking. Finally, its proximity to other businesses could provide the opportunity for collaborations and partnerships, which may be beneficial for your business.

Finally, you should introduce the management team. Explain each member's role, background, and experience.

It is also important to emphasize any past successes that the members of the management team have achieved, and how long they've been working together, as this will help potential lenders or investors understand why they should trust in their leadership.

3. The products and services section

The products and services section of your business plan should include a detailed description of the offerings that your company provides to its customers. 

For example, your arcade game room could offer classic arcade games, virtual reality games, and a variety of console games to its customers. Classic arcade games provide customers with a nostalgic experience, virtual reality games offer an immersive experience, and console games let customers enjoy their favorite titles on the big screen. Customers can also enjoy food and beverage services, as well as a comfortable and inviting atmosphere.

When drafting this section, you should be precise about the categories of products or services you sell, the types of customers you are targeting and how customers can buy them.

4. The market analysis

When you present your market analysis in your arcade game room business plan, it's crucial to include detailed information about customers' demographics and segmentation, target market, competition, barriers to entry, and any relevant regulations.

The main objective of this section is to help the reader understand the size and attractiveness of the market while demonstrating your solid understanding of the industry.

Begin with the demographics and segmentation subsection, providing an overview of the addressable market for your arcade game room, the key trends in the marketplace, and introducing different customer segments along with their preferences in terms of purchasing habits and budgets.

Next, focus on your target market, zooming in on the specific customer segments your arcade game room aims to serve and explaining how your products and services fulfil their distinct needs.

For example, your target market might include people aged 13-18. This group of customers is likely to enjoy classic arcade games and have free time to visit the arcade. Additionally, this age group is likely to have their own income to spend on arcade games and snacks.

Then proceed to the competition subsection, where you introduce your main competitors and highlight what sets you apart from them.

Finally, conclude your market analysis with an overview of the key regulations applicable to your arcade game room.

5. The strategy section

When you write the strategy section of your arcade game room business plan, remember to cover key elements such as your competitive edge, pricing strategy, sales & marketing plan, milestones, and risks and mitigants.

In the competitive edge subsection, elaborate on what makes your company stand out from competitors. This becomes especially important if you're a startup, aiming to carve a place for yourself amidst established players in the marketplace.

The pricing strategy subsection should demonstrate how you plan to maintain profitability while offering competitive prices to attract customers.

Outline your sales & marketing plan, detailing how you'll reach out to new customers and retain existing ones through loyalty programs or special offers.

For the milestones subsection, outline your company's achievements to date and your main objectives for the future, complete with specific dates to set clear expectations for progress.

Lastly, the risks and mitigants subsection should address the main risks that could affect your plan's execution. Explain the measures you've put in place to minimize these risks, assuring potential investors or lenders.

Your arcade game room could face several risks. For example, there may be a risk of theft. People may enter the game room and take items such as game consoles or tokens without permission. Additionally, there might be a risk of damage to the games or consoles. People may play the games too aggressively or drop them, leading to costly repairs or replacements.

6. The operations section

In your business plan, it's also essential to provide a detailed overview of the operations of your arcade game room.

Start by covering your team, highlighting key roles and your recruitment plan to support the expected growth. Outline the qualifications and experience required for each role and your intended recruitment methods, whether through job boards, referrals, or headhunters.

Next, clearly state your arcade game room's operating hours, allowing the reader to assess staffing levels adequately. Additionally, mention any plans for varying opening times during peak seasons and how you'll handle customer queries outside normal operating hours.

Then, shift your focus to the key assets and intellectual property (IP) necessary for your business. If you rely on licenses, trademarks, physical structures like equipment or property, or lease agreements, make sure to include them in this section.

You could have a variety of arcade games as key assets in an arcade game room. This could include classic games such as Pac-Man, Space Invaders and Galaga. Additionally, you might have more modern games such as Dance Dance Revolution or Mario Kart. As for Intellectual Property, the arcade game room could have exclusive rights to certain games, such as a rare vintage game or a game that the room has developed in-house. The room could also have a unique brand logo or an original theme that they have created themselves.

Lastly, include a list of suppliers you plan to work with, detailing their services and main commercial terms, such as price, payment terms, and contract duration. Investors are interested in understanding why you've chosen specific suppliers, which may be due to higher-quality products or established relationships from previous ventures.

7. The presentation of the financial plan

The financial plan section is where we will include the financial forecast we discussed earlier in this guide.

Now that you have a clear idea of what goes into an arcade game room business plan, let's look at some of the tools you can use to create yours efficiently.

What tool should I use to write my arcade game room's business plan?

In this section, we will be reviewing the two main options for writing an arcade game room business plan efficiently:

• Using specialized software,
• Outsourcing the drafting to the business plan writer.

Using an online business plan software for your arcade game room's business plan

Using online business planning software is the most efficient and modern way to create an arcade game room business plan.

There are several advantages to using specialized software:

• You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
• You are guided through the writing process by detailed instructions and examples for each part of the plan
• You can access a library of dozens of complete business plan samples and templates for inspiration
• You get a professional business plan, formatted and ready to be sent to your bank or investors
• You can easily track your actual financial performance against your financial forecast
• You can create scenarios to stress test your forecast's main assumptions
• You can easily update your forecast as time goes by to maintain visibility on future cash flows
• You have a friendly support team on standby to assist you when you are stuck

If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here .

Hiring a business plan writer to write your arcade game room's business plan

Outsourcing your arcade game room business plan to a business plan writer can also be a viable option.

Business plan writers are experienced in writing business plans and adept at creating financial forecasts without errors. Furthermore, hiring a consultant can save you time and allow you to focus on the day-to-day operations of your business.

However, hiring business plan writers is expensive as you are paying for the software used by the consultant, plus their time, and their profit margin of course.

From experience, you need to budget at least £1.5k ($2.0k) excluding tax for a complete business plan, more if you need to make changes after the initial version (which happens frequently after the initial meetings with lenders or investors).

You also need to be careful when seeking investment. Investors want their money to be used to grow the business, not spent on consulting fees. Therefore, the amount you spend on business plan writing services (and other consulting services such as legal services) needs to be negligible relative to the amount raised.

The other drawback is that you usually don't own the business plan itself: you just get the output, while the actual document is saved in the consultant's business plan software - which makes it difficult to maintain the document up to date without hiring the consultant on a retainer.

For these reasons, outsourcing the arcade game room business plan to a business plan writer should be considered carefully, weighing both the advantages and disadvantages of hiring outside help.

Ultimately, it may be the right decision for some businesses, while others may find it beneficial to write their business plan using online software.

Why not create your arcade game room's business plan using Word or Excel?

Using Microsoft Excel and Word (or their Google, Apple, or open-source equivalents) to write an arcade game room business plan is a terrible idea.

For starters, creating an accurate and error-free financial forecast on Excel (or any spreadsheet) is very technical and requires both a strong grasp of accounting principles and solid skills in financial modelling.

As a result, it is unlikely anyone will trust your numbers unless - like us at The Business Plan Shop - you hold a degree in finance and accounting and have significant financial modelling experience in your past.

The second reason is that it is inefficient. Building forecasts on spreadsheets was the only option in the 1990s and early 2000s, nowadays technology has advanced and software can do it much faster and much more accurately.

And with the rise of AI, software is also becoming smarter at helping us detect mistakes in our forecasts and helping us analyse the numbers to make better decisions.

Also, using software makes it easy to compare actuals vs. forecasts and maintain our forecasts up to date to maintain visibility on future cash flows - as we discussed earlier in this guide - whereas this is a pain to do with a spreadsheet.

That's for the forecast, but what about the written part of my arcade game room business plan?

This part is less error-prone, but here also software brings tremendous gains in productivity:

• Word processors don't include instructions and examples for each part of your business plan
• Word processors don't update your numbers automatically when they change in your forecast
• Word processors don't handle the formatting for you

Overall, while Word or Excel may be viable options for creating an arcade game room business plan for some entrepreneurs, it is by far not the best or most efficient solution.

• Having an up-to-date business plan is key to maintaining visibility on your future cash flows.
• A business plan has 2 parts: a financial forecast highlighting the expected growth, profitability and cash generation of the business; and a written part which provides the context needed to interpret and assess the quality of the forecast.
• Using business plan software is the modern way of writing and maintaining business plans.

We hope that this guide helped you to better understand how to write the business plan for an arcade game room. If you still have questions, do not hesitate to contact us.

Also on The Business Plan Shop

• How to write a 5 years business plan
• How to conclude a business plan?
• Tips to write an effective business plan
• Why do you need a business plan?
• Business plan myths

Know someone who owns or wants to start an arcade game room? Share this article with them!

Founder & CEO at The Business Plan Shop Ltd

Guillaume Le Brouster is a seasoned entrepreneur and financier.

Guillaume has been an entrepreneur for more than a decade and has first-hand experience of starting, running, and growing a successful business.

Prior to being a business owner, Guillaume worked in investment banking and private equity, where he spent most of his time creating complex financial forecasts, writing business plans, and analysing financial statements to make financing and investment decisions.

Guillaume holds a Master's Degree in Finance from ESCP Business School and a Bachelor of Science in Business & Management from Paris Dauphine University.

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Here's how you open a profitable arcade game room.

Launching an arcade game room can ignite a sense of nostalgia and create a new hub of entertainment for gamers and families alike.

Whether you're a seasoned arcade enthusiast aiming to create a community space or an entrepreneur looking to tap into the lucrative gaming industry, establishing an arcade game room requires strategic foresight and commitment.

In this blog post, we'll navigate you through the crucial phases of opening an arcade game room, from the spark of an idea to the thrilling launch day.

How you should prepare to open an arcade game room

Market research and concept, choose a concept.

Choosing a concept is one of the first steps in opening an arcade game room because it will define the type of gaming experience you offer, the atmosphere of your space, and the demographic you attract.

This decision will influence your choice of games, the layout of your arcade, pricing strategies, and promotional activities. A well-defined concept can help your arcade game room stand out in a competitive market and draw in a dedicated customer base.

Think of your concept as the theme of your arcade game room's story. It's about setting the tone and creating an environment that resonates with your target audience before you start selecting games and designing the space.

To assist you in making an informed choice, we've compiled a summary of the most popular concepts for an arcade game room in the table below.

Pick an audience

When planning your arcade game room, it's crucial to consider the audience you aim to attract, as this will shape the entire concept of your establishment.

For instance, if you're targeting families with children, you might focus on including a variety of kid-friendly games and redemption machines that offer prizes. You'd likely choose a location that's accessible for families, perhaps near shopping centers or family entertainment complexes.

Conversely, if you're aiming to draw in teenagers and young adults, you might feature the latest in high-tech gaming, virtual reality experiences, and competitive gaming leagues. Your arcade could have a more edgy and modern design and be situated in areas where this demographic tends to hang out, like near colleges or nightlife districts.

Understanding your target audience is essential because it influences every aspect of your arcade game room, from the selection of games and attractions to the interior design and even the location. It's similar to selecting a present; you consider the recipient's preferences before choosing the gift to ensure they'll enjoy it.

Moreover, knowing your audience enables you to communicate with them more effectively. If you're aware of who you're trying to attract, you can tailor your marketing strategies to reach them where they're most likely to notice, such as on social media platforms popular with young adults or family-oriented community events.

In our business plan for an arcade game room , we've identified various customer segments that could be pertinent to your venture.

To provide you with a clearer picture of potential audiences for your arcade game room, we've compiled a few typical examples below.

Get familiar with the industry trends

As you can imagine, staying current with the emerging trends in the arcade game room industry is crucial when opening your own venue.

Trends indicate what's capturing the interest of gamers and entertainment seekers. By aligning with these trends, you can draw in a crowd that's excited to experience the newest and most engaging gaming options. Moreover, integrating trending games and technology helps your arcade stand out from competitors who may offer a more traditional, and potentially outdated, gaming experience.

Actually, we update our business plan for an arcade game room biannually to include the latest emerging trends. We believe this will assist you in creating a more successful arcade game room business.

For instance, there's a rising interest in virtual reality (VR) experiences, which offer players immersive and interactive gameplay. Arcades that provide VR stations can cater to tech-savvy customers looking for cutting-edge entertainment.

Additionally, we've observed that consumers are seeking social gaming experiences, where multiplayer and cooperative games are preferred for group entertainment and events.

As with many sectors, incorporating eco-friendly practices, such as energy-efficient machines and LED lighting, is becoming more significant to environmentally conscious customers.

In the era of social media, having Instagram-worthy setups and unique gaming experiences can greatly enhance your arcade's online presence and attract visitors.

We have compiled more trends in the table below.

However, there are also some declining trends.

You may have noticed that, as players seek more interactive and social experiences, there's a decline in the popularity of single-player, coin-operated games that offer limited engagement.

Also, while classic arcade games have their charm, those that fail to innovate or provide a modern twist may be less appealing compared to their updated or technologically advanced counterparts.

Finally, with a growing emphasis on sustainability, arcades that consume excessive amounts of energy without consideration for eco-friendly alternatives may be viewed negatively by the public.

Choosing the right location

Selecting the ideal location for your arcade game room is a critical step in ensuring its success and requires careful consideration of several factors.

Begin by analyzing the local demographics. Understanding the age range, interests, and disposable income of the community is key. An area with a high concentration of teenagers and young adults might be perfect for an arcade that offers the latest gaming technology and competitive gaming events.

Visibility and accessibility are crucial. A spot that's easily noticeable and reachable by various modes of transportation can significantly boost your arcade's foot traffic. Prime locations might include areas near entertainment complexes, movie theaters, or shopping malls.

Accessibility also means providing ample parking or being within walking distance from residential areas or schools, which can be a major draw for students and families looking for leisure activities.

Competition can be beneficial if it brings more people to the area, but you'll want to ensure your arcade offers unique games or experiences not found in nearby entertainment venues. Proximity to businesses that attract a similar clientele, like fast-food restaurants or cinemas, can create a synergy that benefits all.

Rent costs are a significant factor. High-traffic areas often have higher rents, so you should weigh the potential for increased revenue against the lease expenses. A location with slightly less visibility but substantially lower rent might be more profitable in the long run.

Negotiating favorable lease terms, such as renewal options, caps on rent increases, or a period of reduced rent during the initial setup phase, can have a positive impact on your arcade's financial well-being.

Consider the growth potential of the neighborhood. Is it an up-and-coming area with new developments that could attract more visitors to your arcade? Having the option to expand your premises in the future without relocating can be a significant advantage as your business grows.

Don't underestimate the importance of parking and public transportation. Easy access for customers is a strong factor in generating repeat business.

Employing market research and demographic analysis tools can pinpoint the best locations for your arcade game room. These tools can help identify areas with the ideal customer base for your entertainment offerings.

The choice between a city center and a residential area hinges on your target audience and business model. City centers can provide high foot traffic but may come with steeper rents and increased competition. Residential areas could offer a loyal customer base with potentially lower rent but might require more marketing to become a go-to entertainment spot.

Being situated near schools, universities, or community centers can ensure a steady stream of potential customers, especially if your arcade caters to the social and entertainment needs of these groups.

Understanding local zoning laws, business regulations, and other legal requirements is essential to confirm that your chosen location is suitable for an arcade game room. Ensuring compliance from the outset can prevent costly delays and modifications.

Finally, assessing the long-term viability of a location is vital. Look into future developments in the area that could impact your business, either by drawing in more customers or by increasing competition or operational costs.

Startup budget and expenses

Calculate how much you need to start.

On average, the initial capital needed to open an arcade game room can vary significantly, ranging from $20,000 to $100,000 for a modest operation to $150,000 to $500,000 for a larger venue with state-of-the-art gaming equipment .

If you want to know the exact budget you will need for your own arcade game room and also get a full detailed list of expenses, you can use the financial plan we have created, specifically for arcade game rooms . This excel file is designed to be very user-friendly and will provide you with an instant and comprehensive analysis of your future project.

The budget can vary the most due to the location of the arcade game room. High-traffic areas in city centers or near entertainment districts tend to have higher rental costs, which can significantly impact startup expenses.

The size of the arcade game room also plays a crucial role in determining the initial investment. A larger space not only increases rent but also requires more gaming machines, staff, and maintenance, leading to higher operational costs.

The quality and selection of gaming equipment are other significant factors. The latest and most popular arcade machines are expensive but can attract more customers and potentially generate more revenue. On the other hand, starting with used or classic arcade machines can reduce initial costs but may not draw as large of a crowd.

If the available capital is limited, it's still possible to open an arcade game room, but careful planning and prioritization are essential. The very minimum budget could be around $20,000 to $40,000 if you choose a low-cost location, minimize the size of your operation, buy used gaming machines, and manage much of the work yourself. This approach requires a hands-on strategy, focusing on a niche gaming experience to reduce complexity and costs.

To make the most of a limited budget, consider the following tips.

Identify all your expenses

The expenses when starting an arcade game room include game and equipment purchases, licensing and permits, insurance, marketing and advertising, technology and software, staff training, prize inventory, and a reserve for unexpected expenses.

Essential equipment for an arcade game room includes arcade machines, redemption games, seating, and change machines. Costs can vary widely based on whether you buy new or used equipment. On average, you might spend between $20,000 to $200,000. High-end or new equipment will be at the upper end of this range, while you can save by purchasing used equipment. Arcade machines and redemption games are among the most important, as they directly impact your ability to provide entertainment and generate revenue.

Licenses and permits are critical for legal operation. Costs vary by location but typically range from a few hundred to a few thousand dollars. This includes amusement licenses, health department permits if you serve food, and possibly a liquor license if you plan to serve alcohol.

Insurance is, obviously, non-negotiable to protect your business against liability, property damage, and other potential risks. Essential policies include general liability, property insurance, and workers' compensation if you have employees. Annual premiums can range from $3,000 to $10,000 or more, depending on your coverage levels and arcade size.

Also, allocating funds for marketing and advertising is crucial for attracting customers. Initially, you might spend between $2,000 to $10,000 on marketing efforts, including social media advertising, traditional advertising, and creating a website. The amount can vary based on your strategy and the competitiveness of your market.

Investing in technology and software for point-of-sale systems, inventory management, and accounting software is important. Costs can range from $1,500 to $15,000, depending on the sophistication of the systems you choose. Subscription-based services may have ongoing monthly fees.

There are also training costs for staff to ensure excellent customer service and proper handling of the games. Setting aside $1,000 to $4,000 for initial training and ongoing professional development can help ensure a high-quality experience for customers. This also includes any costs for obtaining or maintaining personal certifications.

Prize inventory for redemption games is an ongoing expense that can fluctuate based on the types of prizes you offer and your arcade's volume. Initial inventory setup can cost between $3,000 to $20,000. Developing relationships with reliable suppliers and considering bulk purchases can help manage costs.

Finally, setting aside a reserve for unexpected expenses or emergencies is crucial. A good rule of thumb is to have at least three to six months' worth of operating expenses saved. This can cover unforeseen repairs, game failures, or shortfalls in cash flow.

Here is a summary table to make it easier to digest. For a full breakdown of expenses, please check our financial plan for arcade game rooms .

Business plan and financing

Make a solid business plan.

Embarking on the journey of opening an arcade game room is an exciting venture, but it's not without its challenges. A solid business plan is your first step towards success.

Why is a business plan so important for an arcade game room? It acts as a strategic guide, detailing your vision, the steps you'll take to achieve it, and the potential hurdles along the way. A comprehensive business plan is also indispensable for securing funding, as it shows investors and banks the profitability and sustainability of your entertainment hub.

An effective arcade game room business plan should encompass several key elements, including market research, financial projections, and operational strategies. Market research is crucial as it helps you understand your target demographic, their gaming preferences, and the competitive environment. This involves analyzing trends in the gaming industry, pinpointing your direct competitors, and identifying a unique angle—such as offering vintage arcade games or cutting-edge virtual reality experiences—that sets your arcade apart.

Financial planning is equally vital. This section should detail your anticipated income, including the cost of acquiring arcade machines, maintenance expenses, and staffing costs. It should also feature financial forecasts like profit and loss statements, cash flow analysis, and a break-even point. These projections provide a clear view of your arcade's fiscal prospects to you and your potential backers. You can find a comprehensive model in our financial plan for an arcade game room .

While the structure of an arcade game room business plan shares commonalities with other business plans, certain aspects will be more pronounced.

For instance, an arcade will focus heavily on location selection (areas with high youth or family traffic are preferable), technology investments (keeping up with gaming trends), and creating a safe and engaging environment for customers. Additionally, you should address licensing and compliance with any regulations specific to gaming and entertainment businesses.

To craft an effective business plan for your arcade game room, thorough research and realistic financial estimates are essential. Engage with your intended audience to gauge their gaming preferences and spending habits. Also, consider how you might scale your business or adapt your game offerings to keep up with industry changes.

For an arcade, building a strong brand identity and marketing strategy is crucial. Whether you're emphasizing the nostalgic appeal of classic games or the thrill of the latest technology, your marketing efforts should connect with your target audience and set you apart from competitors.

Success depends not only on the entertainment value of your games but also on meticulous planning, market understanding, prudent financial management, and effective execution of your operational plan.

Remember, a business plan is not static; it's a dynamic document that should be regularly reviewed and adjusted as your arcade game room grows and adapts to new challenges and opportunities.

Get financed

Don't have the capital to launch your arcade game room on your own? No problem, there are plenty of financing options available to you.

Financing for your arcade game room can come from various sources, including raising capital from investors, securing loans from banks or financial institutions, and obtaining grants or subsidies.

Each financing method has its own set of benefits and things to consider.

Raising capital means finding investors who will provide funds in exchange for equity in your arcade game room. This is great because it doesn't involve regular repayments like a loan does.

However, it does mean you'll be sharing ownership and may have to compromise on some business decisions.

For an arcade game room, this could be a good strategy if you're looking to scale quickly or need a substantial amount of money upfront for state-of-the-art gaming machines or a prime real estate location. To attract investors, you'll need a robust business plan that shows growth potential, profitability, and a deep understanding of the gaming and entertainment industry.

Another option is to take out a business loan.

This method allows you to maintain complete control over your business but requires you to pay back the borrowed amount with interest. Loans can be used for a variety of purposes, such as buying gaming equipment, covering initial operating costs, or financing renovations.

Banks usually ask for a down payment or collateral; this can vary but often falls between 15% to 25% of the loan's value. It's crucial to consider how much of your budget will come from loans to avoid overwhelming your arcade game room with debt. Ideally, your projected earnings should be able to cover the loan payments while still allowing for operational costs and business growth.

Grants and subsidies are another avenue to explore, though they're less common.

These funds are typically provided by government bodies or non-profit organizations to support small businesses, particularly in areas that are underserved or within specific industries. Grants don't need to be repaid, but they are competitive and often have strict requirements.

For an arcade game room, grants might not be the most reliable main source of funding but could complement other financing methods for particular projects or needs.

To effectively secure financing from lenders or investors for your arcade game room, you must prove that your business concept is viable and profitable.

This means creating a comprehensive business plan that includes market analysis, a clear definition of your target demographic, detailed financial forecasts, and an effective marketing strategy. Your business plan should emphasize what makes your arcade unique, such as exclusive game offerings, a strong brand identity, or an excellent location.

Lenders and investors will judge your arcade based on several factors, including your creditworthiness, business experience, available collateral, and the strength of your business plan.

They will scrutinize the financial projections of your arcade game room to determine if you can generate sufficient revenue to cover operating costs, repay debts, and still turn a profit. Showing a thorough grasp of the gaming market, including trends, customer preferences, and competitive analysis, will also strengthen your case.

Below is a summary table of the various financing options mentioned for opening an arcade game room, along with their advantages, considerations, and potential uses:

Legal and administrative setup

Permits and licenses.

Opening and operating an arcade game room is an exciting venture that requires attention to various regulations and requirements to ensure the safety and enjoyment of your customers, as well as to safeguard your business.

The specific permits, licenses, health department regulations, inspection schedules, consequences of non-compliance, and insurance policies you'll need will differ based on your location, but there are common standards that are applicable in many areas.

First, you'll need to secure the necessary business permits and licenses.

This often includes a general business license from your city or county, and a sales tax permit if your state imposes sales tax. Depending on the nature of your arcade game room, if you plan to serve food or beverages, you might need additional permits such as a food establishment permit. If you intend to offer alcohol, a liquor license will be required.

It's imperative to consult with your local government to determine the exact requirements for your area.

Regarding health department regulations, if your arcade game room serves food, you must adhere to food safety and sanitation standards to prevent foodborne illnesses.

This involves proper food handling, storage, and preparation practices, maintaining the cleanliness of the facility, and regular training for employees on food safety. Health department inspections are carried out to ensure adherence to these regulations. The frequency of inspections can vary, but they are typically conducted at least once a year, or more frequently if there are complaints or past issues. Some localities may also mandate a pre-operational inspection before you can open your arcade game room.

Failure to comply with health department regulations can lead to penalties ranging from fines to the temporary shutdown of the business until issues are resolved.

In extreme cases, non-compliance can result in permanent closure or legal action. It's vital to take these regulations seriously and ensure your arcade game room meets all health and safety standards.

Insurance is another essential element in protecting your arcade game room business. At the very least, you'll need general liability insurance to cover accidents or injuries that occur on your property.

Property insurance is crucial to protect your arcade's equipment and machines from damage or theft. If you employ staff, workers' compensation insurance will generally be mandatory by law to cover injuries or illnesses that they may suffer due to their work.

Additionally, considering business interruption insurance could be beneficial, as it can help cover lost income if your arcade game room must close temporarily due to a covered event.

Business Structure

The three common structures for opening an arcade game room are LLC (Limited Liability Company), partnership, and sole proprietorship. Each has their unique features and implications for your business.

Please note that we are not legal experts (we specialize in business and financial planning) and that your choice should be based on how much risk you're willing to accept, how you prefer to handle taxes, and your plans for growing and possibly selling your arcade game room.

In simple terms, a sole proprietorship is simple and straightforward but carries personal liability. A partnership allows for shared responsibility but requires clear agreements to manage risks. An LLC offers a balance of protection and flexibility, making it a strong option for many businesses looking to scale.

Consider your long-term goals, and consult with a financial advisor or attorney to make the best choice for your arcade game room.

We’ll make it easier for you, here is a summary table.

Getting started to open an arcade game room

Offer development, design and lay out.

Designing and laying out your arcade game room for operational efficiency and an optimal customer experience requires thoughtful consideration and strategic planning.

Let's explore how you can accomplish this, focusing on game placement, balancing technology investments with budget, and ensuring safety and comfort.

Firstly, understanding game flow is crucial.

Your arcade's design should lead customers naturally from the entrance to the most popular games, creating a journey that encourages exploration and engagement. This flow should be seamless, minimizing congestion and ensuring a smooth transition from one game to another. Place your most popular and eye-catching games, like racing simulators or dance machines, near the entrance to immediately draw customers in.

This setup not only highlights your key attractions but also motivates customers to delve deeper into the arcade, potentially increasing their time spent and money invested in your establishment.

Regarding the design to facilitate this flow, consider the layout's navigability and accessibility.

Spacious aisles, clear signage, and a logical arrangement of the games promote easy movement and a comfortable environment. The redemption counter should be clearly visible and separate from game areas to avoid confusion and crowding. If your arcade includes a lounge or party area, ensure it's comfortably distanced from the game floor to provide a peaceful space for groups or individuals to relax.

Balancing the need for cutting-edge gaming technology with budget constraints is a challenge many operators face.

Start by prioritizing essential gaming machines that are known for their popularity and revenue generation, such as claw machines and interactive multiplayer setups. These are worth the investment as they are the main attractions of your arcade's operations. For other items, consider leasing equipment or opting for revenue share agreements with suppliers to save on upfront costs without significantly compromising on the variety of games offered.

Additionally, plan for machines that offer versatility and appeal to a broad audience, like cabinets that can be updated with new games, to maximize the value of your investment.

Safety and comfort in the arcade layout are imperative. Your design must include clear pathways and emergency exits to ensure quick evacuation if necessary. Install anti-slip flooring in areas prone to spills or where drinks are allowed, and ensure that all electrical wiring is safely secured and out of the way to prevent tripping hazards.

Specific protocols for machine maintenance and cleanliness are essential for customer safety and satisfaction. Implement a system that ensures all machines are regularly cleaned and sanitized, with controls and seats wiped down frequently to maintain hygiene standards.

Train your staff thoroughly in safety practices, emphasizing the importance of routine checks, addressing potential hazards promptly, and maintaining a clean and welcoming environment for all guests.

Regularly review and update these protocols to comply with local safety regulations and best practices, ensuring your arcade remains a safe and enjoyable destination for everyone.

Craft your offer

Your game selection and the overall experience will be the reason why your arcade game room is successful (or why it is failing).

To start, identify the preferences and needs of your target market through direct engagement, such as surveys and social media interactions, and indirect research, like observing trends in your area and reviewing what successful competitors are doing.

Once you have a clear picture of your target market's preferences, you can begin to curate a selection of games that not only appeals to their tastes but also stands out.

Incorporating the latest technology and popular themes in your arcade game room is a fantastic way to enhance appeal and keep your offerings fresh. This approach not only attracts gamers who are looking for the newest experiences but also ensures that your game room stays relevant. Make connections with game distributors and manufacturers to understand what new games will be available throughout the year. This knowledge allows you to plan your game rotation, offering special features that can attract customers looking for the latest and greatest in gaming. Regular updates to your game selection also create anticipation among your customers, as they look forward to trying out new games.

To ensure your arcade games stand out in a competitive market, focus on uniqueness and quality.

This can be achieved by offering exclusive titles that are hard to find elsewhere, such as imported games or those with a cult following. Telling the story behind your games, such as the history of a classic arcade machine or the development process of a new indie game, can also add a unique appeal.

Ensuring consistency and quality in your arcade experience involves maintaining your machines to the highest standard and offering a comfortable and inviting environment.

This can include regular maintenance schedules for each machine, thorough training for your staff on troubleshooting common issues, and regular checks to ensure all games are functioning properly. Consistency is key to building trust with your customers, as they will know exactly what to expect each time they visit your arcade. Invest in high-quality machines and a well-designed space, and don’t shy away from making improvements based on customer usage and feedback.

Also, utilizing customer feedback is essential for continuous improvement and refinement of your arcade game room offerings. Create channels for feedback, such as comment cards, online surveys, and social media engagement, to understand what your customers love and where there might be room for improvement.

Be open to constructive criticism and willing to make changes based on customer input. This not only helps in refining your game selection but also shows your customers that you value their opinions, fostering loyalty and repeat business.

Determinate the right pricing

When opening an arcade game room, it's crucial to establish a pricing strategy that balances profitability with customer appeal. Here's a methodical approach to setting your prices.

Begin by thoroughly understanding your costs, which include the purchase or lease of arcade machines, maintenance, labor, rent, utilities, and any additional expenses associated with operating your arcade. This will ensure your prices not only cover these costs but also contribute to your business's profitability.

Next, analyze your competition and the general market to gauge the going rates for arcade game play. While you don't need to strictly adhere to these prices, they provide a reference point for what customers might expect to pay.

Understanding the price sensitivity and preferences of your target audience is also key. Gather insights through customer interactions, surveys, or by experimenting with different price points and observing the effect on your revenue. This will help you find the sweet spot where customers feel they're getting good value without feeling overpriced.

Psychological pricing strategies can subtly influence customer behavior.

For example, setting game credits at $0.95 instead of $1 can make a difference in perception, suggesting a better deal. This tactic can be particularly effective for games that are played frequently or for shorter durations.

However, you should apply this strategy wisely to avoid undermining the perceived value of the gaming experience you offer.

The perceived value is crucial in an arcade setting.

Enhancing this perception can be achieved through the quality and variety of games, the overall gaming environment, and customer service. For instance, investing in the latest gaming technology, maintaining a vibrant and engaging atmosphere, and providing excellent service can justify higher prices because customers perceive a superior gaming experience.

Implementing time-based pricing strategies, such as lower rates during off-peak hours, can help increase traffic during slow periods. Alternatively, offering VIP passes or loyalty programs can create a sense of exclusivity and encourage repeat visits.

When introducing new machines or features, consider using introductory pricing, such as discounted play for a limited time or bundled offers with other games. Once these new attractions gain popularity, you can adjust the pricing based on their success and operational costs.

For special events or party bookings, consider different pricing structures that reflect the added value and convenience of reserved space and dedicated machines. This could include flat-rate packages or per-person pricing models.

Lastly, the psychological impact of discounts in an arcade environment should be carefully managed. While promotions and special deals can drive traffic and create excitement, overuse can lead to a perception of lower quality or desperation. Use discounts and promotions strategically, perhaps tied to events, holidays, or as rewards for customer loyalty, without allowing them to become the norm.

Manage relationships with your suppliers

Poor relationships with suppliers could spell game over for your arcade game room in no time.

On the contrary, building strong ties with game and equipment suppliers will ensure the steady availability of high-quality gaming machines and accessories.

Regular communication, timely payments, and expressing appreciation for their products and services can foster loyalty and reliability. Be transparent about your expectations and needs, and whenever possible, visit their manufacturing facilities or showrooms. This deepens your understanding of their processes and challenges, enabling you to work together more effectively.

Additionally, consider long-term contracts for key gaming machines to secure better prices and guarantee supply, but also maintain a network of backup suppliers to mitigate risks of equipment failure or shortages.

For managing the lifecycle of gaming machines, inventory management techniques such as First-In, First-Out (FIFO) are essential. This approach ensures that older machines are maintained or rotated out before newer models, reducing the chance of having outdated or non-functioning equipment. Regularly monitor inventory levels to adjust orders according to trends and player demand, avoiding overstocking and minimizing the chance of having idle machines.

Technology can significantly improve inventory management and enhance the gaming experience in an arcade game room.

Implementing an inventory management system that integrates with point-of-sale (POS) systems allows for real-time tracking of machine usage and sales data. This technology can help predict demand more accurately, streamline ordering processes, and identify trends that can inform game selection and promotional strategies.

Additionally, digital tools can facilitate better communication with suppliers, enabling more efficient order adjustments and collaboration.

Scaling arcade operations presents challenges such as maintaining machine quality, managing increased costs, and ensuring customer satisfaction. Address these challenges by standardizing maintenance procedures, training staff thoroughly, and investing in equipment that can increase efficiency without compromising the gaming experience.

Scaling up also means more gaming machines and accessories, so negotiate pricing with suppliers for bulk purchases without sacrificing equipment quality. Quality control becomes even more critical as the number of machines increases, requiring strict adherence to maintenance standards and more frequent quality checks.

Implementing effective cost control measures involves scrutinizing every aspect of sourcing and using arcade game machines and supplies. Regularly review and negotiate with suppliers to ensure you're getting the best prices without compromising quality.

Also, consider alternative gaming machines that may offer cost savings or unique experiences. Utilize technology to track and analyze costs, machine downtime, and inventory levels to identify areas for improvement. Reducing machine downtime not only cuts costs but also ensures a consistent and enjoyable experience for gamers, which is essential for customer retention.

Hire the right people

When opening an arcade game room, you should consider the staffing needs that will ensure your business runs smoothly and your customers have a great experience.

Initially, you'll need a team that can handle customer service, game maintenance, and overall management.

For customer service, you'll need attendants who can assist players, handle token or card transactions, and maintain a friendly environment. These individuals should be enthusiastic, knowledgeable about the games, and able to handle customer inquiries and issues.

Technical staff, such as game technicians, are essential for keeping the arcade games operational. They will troubleshoot and repair machines, perform regular maintenance, and update software as needed. Hiring someone with experience in electronics and a passion for gaming technology is key.

A manager or owner-operator is crucial to oversee the day-to-day operations, manage staff, and handle administrative duties. This includes scheduling, inventory management, and ensuring compliance with safety regulations.

As your arcade game room grows, you might consider hiring additional roles such as event coordinators for hosting parties or tournaments, marketing specialists to promote your business, and additional administrative staff.

Outsourcing can be a strategic approach for roles like accounting and marketing, allowing you to focus on your core competencies while leveraging external expertise.

When hiring, prioritize candidates with a mix of technical skills, experience, and a passion for gaming and customer service.

For game technicians, look for technical training and hands-on experience with electronics or arcade games. Customer service skills are paramount for attendants, along with the ability to work efficiently in a fast-paced environment. For managerial roles, seek candidates with experience in entertainment or retail management, a strong understanding of business operations, and leadership qualities.

To assess the fit of potential hires for your arcade's unique culture and demands, consider incorporating practical assessments into your hiring process, such as repair tests for technicians or role-playing customer service scenarios for attendants.

Look for candidates who demonstrate a genuine passion for gaming and customer service, as well as the ability to adapt to the dynamic nature of the entertainment industry.

Finding candidates with the right background and passion for gaming and customer service can be challenging.

Utilize gaming forums, social media platforms, and local gaming communities to reach potential candidates. Networking within these communities and attending job fairs can also be effective strategies. Consider offering internships or apprenticeships to tap into emerging talent from technical programs.

Here is a summary table of the different job positions for your arcade game room, and the average gross salary in USD.

Running the operations of your arcade game room

Daily operations.

Running an arcade game room can be a complex operation, but with the right systems and processes in place, it can also be an incredibly rewarding business. Here are some practical tips to help you streamline your daily operations and ensure your arcade is a hit with gamers of all ages.

Firstly, investing in a robust Point of Sale (POS) system tailored for arcade game rooms can make a world of difference. Look for a POS that integrates credit and token sales, prize inventory management, and customer loyalty programs. This will allow you to monitor game usage and popularity, manage your prize inventory effectively, and keep track of your customers' preferences and spending habits.

Many advanced POS systems also support card-based systems for game credits, which can simplify transactions and encourage repeat business through reloadable game cards.

For prize inventory management, you'll want software that can track your prizes and redemption items in real-time. The best systems will enable you to set alerts for low stock levels and generate reports on redemption trends, helping you to stock the most popular items and avoid over-ordering less popular ones.

Some systems also offer features like expiration date tracking for items that may have a limited shelf life or need to be cycled out periodically to keep the prize selection fresh and exciting.

Building strong relationships with game and prize suppliers is essential for an arcade's success. Establish clear communication channels and set expectations early on regarding delivery schedules, product quality, and payment terms. A good relationship can lead to better prices and reliability. It's also prudent to have a backup plan and maintain relationships with multiple suppliers to ensure you can always meet your operational needs.

Creating a positive work environment for your staff is crucial. This includes regular training on new games and customer service, clear communication of goals and expectations, and constructive feedback. Recognizing and rewarding hard work and achievements can boost morale. Fair and considerate work schedules are also important for maintaining a good work-life balance for your team.

Ensuring that every customer has a positive experience starts with the atmosphere of your arcade, the functionality and variety of your games, and the service provided by your team.

Train your staff to be attentive, friendly, and efficient. Encourage them to engage with customers, offering tips on games or helping them with any issues that arise, making each visit memorable.

Maintaining a clean, well-lit, and inviting space with clear signage and an easy-to-navigate layout is key to enhancing the customer experience.

Effective customer service policies for an arcade might include a satisfaction guarantee, clear policies on token refunds or game malfunctions, and a system for gathering and acting on customer feedback.

Make it easy for customers to provide feedback, whether in-person, through your website, or via social media. Respond to feedback promptly and constructively, showing that you value their input and are committed to continuous improvement.

Handling customer feedback and complaints with grace is critical. Listen fully before responding, apologize where necessary, and offer a solution or compensation, such as bonus tokens, free game time, or discounts on future visits.

Use negative feedback as an opportunity to refine your operations, game offerings, or service. Turning a negative experience into a positive one can often win you a loyal customer and enhance your reputation as a fun and responsive arcade game room.

Revenues and Margins

Know how much you can make.

Understanding the financial workings of an arcade game room is crucial for success in this entertainment sector.

We have a comprehensive article on the profitability of arcade game rooms that delves into the details. Below, we'll provide a summary of some key points.

One of the first questions you might have is about the average spend per customer, or "basket size," at your arcade game room.

The average basket size for an arcade game room is the average amount a customer spends during their visit.

This figure can vary greatly depending on the type of arcade, location, and the mix of games and attractions offered. For a traditional arcade with classic and modern video games, the average basket size might be between $10 and $25 .

For a family entertainment center that includes additional attractions like mini-golf, laser tag, or go-karts, the average spend per visit could be higher, perhaps $20 to $40 .

VR arcades, which offer immersive virtual reality experiences, might see even higher basket sizes due to the novelty and higher cost of the technology, with averages between $30 and $50 .

When it comes to revenue, there's a broad range. You can estimate your arcade's revenue accurately with our specialized financial plan for arcade game rooms .

Urban arcade game rooms might see monthly revenues ranging from $10,000 to over $50,000 , which translates to annual revenues from around $120,000 to over $600,000 .

Rural arcades, with a smaller potential customer base, might expect annual revenues on the lower end of that spectrum, typically between $50,000 and $300,000 .

Newly opened arcades may experience lower revenues initially as they work to build a customer base and brand recognition. Monthly revenues of less than $10,000 are common in the startup phase.

Well-established arcades, on the other hand, can benefit from repeat customers and word-of-mouth, leading to higher and more stable revenues.

VR arcades, while potentially earning higher per-customer revenue, may face limitations in scaling due to the niche nature of their offerings. Annual revenues for these establishments often fall below $500,000 .

Family entertainment centers, with their diverse attractions, often see higher revenues, sometimes exceeding $1 million annually .

Arcades don't just make money from game tokens or entry fees. They have a variety of revenue streams available to them.

If you're looking for inspiration, here's a table that outlines many different ways an arcade game room can generate income.

Understand your margins

As with any business, understanding the difference between revenue and profit is crucial for an arcade game room. Revenue is the total income generated, but it's the margins that will determine your actual earnings.

Let's delve into the gross and net margins, which are key indicators of an arcade's profitability.

To calculate your own margins and get a precise figure for your potential profit, you can adjust the assumptions in our financial model designed for an arcade game room .

The typical range of gross margins for arcade game rooms can vary, often falling between 25% to 50%.

Gross margin is calculated by subtracting the cost of goods sold (COGS), which for an arcade would include the direct costs associated with the operation of the games and attractions, such as maintenance and equipment costs, from the revenue generated from the game room activities, then dividing this number by the revenue, and finally, multiplying by 100 to get a percentage.

Net margins consider not only the COGS but also all other expenses an arcade incurs, such as rent, utilities, staff wages, marketing, and taxes. This figure is obtained by subtracting all operating expenses from the gross profit.

Net margins offer a more complete view of an arcade's profitability and are typically lower than gross margins, with averages often ranging from 10% to 20% across the industry, reflecting the tighter profitability after all costs are accounted for.

Different types of arcade game rooms—traditional arcades, family entertainment centers, and VR arcades—can have varying profit margins due to differences in their business models, scale of operations, and target markets. Here is a table to illustrate these differences.

Margins in an arcade game room are influenced by factors such as the mix of games, pricing strategy, and scale of operations.

A diverse game mix can attract a wider audience but may increase operational complexity and costs. Pricing strategy is critical; prices must be competitive yet sufficient to cover costs and generate profit. Scale of operations can impact cost efficiencies, with larger arcades often benefiting from lower per-game costs.

Ongoing expenses that affect arcade margins include equipment costs, labor, rent, and utilities. Equipment costs can be significant, especially with the need to regularly update games to keep the arcade attractive. Labor is another major expense, as a well-staffed arcade is essential for customer service. Rent can vary greatly by location, and utilities can be substantial, particularly for arcades with high-tech games and attractions.

Arcades focusing on niche markets, such as VR experiences, may have different margin dynamics compared to those with a broader range of attractions.

While niche arcades can charge higher prices, they also face higher operational costs and potentially limited market size, which can impact overall margins.

External factors such as economic conditions, seasonal fluctuations, and consumer trends also play a significant role in arcade margins. Economic downturns can reduce discretionary spending on entertainment, while seasonal peaks can increase revenue. Staying current with consumer trends and updating the game selection accordingly can help manage these fluctuations.

The challenge of maintaining healthy margins in the face of rising equipment and labor costs is significant. Arcades can address these challenges through efficient cost management, strategic pricing, optimizing operations for energy efficiency, and investing in technology for productivity improvements.

Regularly tracking and analyzing financial performance, including gross and net margins, is essential for ensuring the financial health and sustainability of an arcade game room (and you can do all of that with our financial model specifically for arcades ).

Implement a strong marketing strategy

Marketing doesn't need to be as complex as some experts make it seem. We understand you'll be busy managing your arcade game room and won't have a ton of time for extensive promotions. That's why we'll keep our advice straightforward and impactful, similar to the marketing strategy we've detailed in our business plan for an arcade game room .

Creating a brand for your arcade game room is not just relevant; it's essential.

Your brand is the identity that customers recognize and remember. It's more than just your logo or the neon lights you choose; it's also the fun and excitement you provide. Your brand should reflect the thrilling experiences your arcade games offer, the vibrant atmosphere of your game room, and the values you uphold, such as community engagement or providing a family-friendly environment. This helps your arcade stand out in a competitive market and builds a dedicated customer base.

For your marketing plan, begin by identifying your target audience. Who are your ideal patrons? What do they enjoy? Are they seeking a nostalgic arcade experience, a place to host parties, competitive gaming, or casual fun? Knowing your audience will shape your branding and promotional efforts.

When it comes to promotion, social media and digital marketing are invaluable tools for arcade game rooms. Platforms like Instagram, TikTok, and Facebook are ideal for showcasing your arcade's vibrant environment and exciting games through dynamic videos and engaging posts.

Share sneak peeks into new game arrivals, host live gaming events, and feature high scores or tournaments to add a personal touch and demonstrate the excitement that awaits at your arcade.

Customer reviews and testimonials can foster trust and motivate others to visit your game room. Hosting gaming tutorials or sharing tips can also engage your audience, providing them with value and positioning your arcade as a hub for gamers.

Content strategies that work well for arcade game rooms include highlighting the variety and exclusivity of your games, special events or promotions, and showcasing any unique gaming experiences or technology you offer. Collaborating with local businesses, schools, or influencers can also increase your visibility.

However, not all techniques may be suitable for your arcade. For instance, if your target audience is local, investing in national-level advertising might not be the most efficient use of your funds. Similarly, if your arcade focuses on retro games, promoting the latest VR experiences might not resonate with your brand.

Even on a tight budget, there are clever tactics you can employ to attract new gamers.

First, consider participating in local festivals or fairs where you can set up a pop-up arcade. This not only boosts sales but also introduces your game room to the community.

You can also offer free play periods or game tokens to first-time visitors to get people excited about your arcade.

Partnering with local eateries or movie theaters can extend your reach, offering a complete night-out package.

Creating a loyalty program can incentivize repeat visits. Simple point systems or digital rewards programs can be highly effective.

Also, never underestimate the power of word-of-mouth marketing. Encourage your happy gamers to spread the word by providing them with bonuses for bringing friends.

Grow and expand

We want your arcade game room to thrive. The insights provided here are designed to help you reach that goal.

Imagine your arcade game room is already a hit, with a steady stream of gamers and healthy profits. Now it's time to level up and consider strategies for growth and expansion.

There's always a next level to conquer, and we're here to guide you through the power-ups and bonus stages of business expansion.

Also, please note that we have a 3-year development plan specifically for arcade game rooms in our business plan template .

Successful arcade game room owners often possess qualities like resilience, adaptability, a passion for gaming, and the ability to connect with their community. These traits are essential as you navigate the challenges of scaling your business.

Before adding new games or attractions, consider the market demand, the compatibility with your current offerings, and the impact on your operations.

Market research is key. By understanding gamer preferences, industry trends, and the performance of similar attractions, you can make informed decisions that resonate with your audience and fit your business model.

To evaluate the success of your current operations, look at foot traffic trends, customer feedback, and operational efficiency. If your arcade is consistently busy, receives positive reviews, and runs smoothly, it might be time to hit the expansion button.

Opening additional locations should be based on clear evidence of demand, a deep understanding of the target demographic, and the financial stability of your existing operation.

Franchising can be a way to grow with less capital risk, tapping into the entrepreneurial spirit of franchisees. It requires a strong brand, proven operational systems, and the ability to support your franchisees. Opening company-owned locations offers more control but demands more capital and hands-on management. The choice between these models depends on your business goals, resources, and preferred growth path.

Digital channels, including social media and online booking systems, can significantly increase your arcade's visibility and revenue. An online presence allows you to engage with a broader community, adapting to the growing desire for digital interaction and convenience.

This strategy requires knowledge of digital marketing, managing online reservations, and creating a vibrant online community.

Branding is critical as it sets your arcade apart in a competitive market. A strong, consistent brand identity across all locations and platforms can build customer loyalty and attract new gamers. Enhance your brand by ensuring every interaction reflects your arcade's unique atmosphere and commitment to fun.

Consistency across multiple locations is a challenge but is vital for success. Achieve this through comprehensive operational manuals, staff training programs, and quality control systems.

Regular visits and audits, along with nurturing a strong, shared culture, help ensure each location maintains the high standards that made your original arcade popular.

Financial indicators that you're ready for expansion include consistent profitability, robust cash flow, and meeting or exceeding revenue projections over a significant period.

Having a scalable business model and the operational capacity to support growth is also essential.

Partnerships with game developers, hosting tournaments, and participating in gaming conventions can introduce your arcade to new customers and markets. These collaborations can lead to community engagement and increased visibility, fueling your arcade's growth.

Scaling up to meet higher demand might involve logistical considerations such as acquiring more machines, implementing advanced technology, and possibly expanding your physical space. Ensuring that your supply chain and maintenance teams can handle the increased workload without compromising the gaming experience is crucial.

Ultimately, your expansion efforts must stay true to your arcade's core values and objectives. Growth should enhance, not detract from, the unique gaming experience that made your arcade a success.

Regularly revisiting your business plan and core values can help ensure that your growth strategies are aligned with your vision, keeping the spirit of your arcade alive as it levels up.

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Running your own Time Machine: Venture into the Exciting World of Arcade Business

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How to Start an Arcade for Entrepreneurs

5 Minute Read

Does the sound of a pinball machine make your ears perk? What about the excitement of players competing against each other to win a game? If you answered ‘yes’ to these questions, you might be thinking about how to start an arcade and what steps to take to become and remain a success. Well, the answer might surprise you. 

Starting an arcade is great for an entrepreneur looking for something new and exciting, and it could become very profitable if it is a success. However, running an arcade differs daily with all the experiences and attractions you can add to a location. 

Be sure to continue reading for our guide on steps and tips you need to know when starting an arcade. 

Step 1: Create a Business Plan

If you’re serious about opening an arcade , you must develop a business plan to help you get started. A business plan is essential in setting your goals and ideas to ensure success.

You’ll need to figure out your business finances and see the best ways to get funding for your project. In addition, what other attractions will you have? Do you envision your location as a more miniature classic/old-school style arcade or a large family entertainment center that might include a full restaurant with a bowling alley, laser tag, and other prominent attractions? These are crucial decisions to consider when building out your business plan.

If you don’t already have a location in mind, start brainstorming ideas for your arcade. That way, you will know the rent prices and can include them in your business plan and budget. 

It would help if you also outlined how to get business licenses and permits within your business plan. While arcades are not gambling, you must obtain the correct permits so your business can run legally.  

Step 2: Navigating the Permit Puzzle: Key Licenses for Your Arcade Dream

Opening an arcade is an exciting journey, but before the joysticks start singing, you must navigate the sometimes-daunting realm of permits and licenses. Don’t worry; it’s less of a maze and more like a well-organized treasure hunt! Here’s a compass to guide you:

Local Licenses:

• Business License:  Every arcade needs a basic business license from your city or county. It’s the foundation upon which you build your operation.
• Zoning Permits:  Ensure your chosen location allows arcades through proper zoning permits. This avoids surprises down the line.
• Building Codes and Inspections:  Ensure your premises meet all safety and accessibility regulations. Building inspections will greenlight your operations.
• Specific Activity Permits:  Depending on your offerings, you might need additional permits for equipment like pool tables, laser tag arenas, or food and beverage service.

State and Federal Requirements:

• Employer Identification Number (EIN):  Register your business with the IRS by obtaining an EIN. This unique number simplifies tax filing and opens doors to business accounts.
• State Sales Tax Permit:  Most states require you to collect and remit sales tax. Obtaining a sales tax permit ensures compliance and avoids future headaches.
• Alcohol and Food Permits:  If you plan to serve alcohol or food, you will need additional permits and inspections from relevant state and local agencies.

Beyond the Paperwork:

• Research Your State and City:  Regulations differ, so delve into your specific state and city requirements. Online resources and local business advisors can help you navigate the specifics.
• Start Early:  Don’t wait until opening day! Obtaining permits and licenses can take time, so start early to avoid delays.
• Embrace the Teamwork:  Don’t hesitate to seek help from professionals familiar with your local landscape. Accountants, lawyers, and business consultants can ease the process.

Remember, getting the proper permits and licenses isn’t just about checking boxes; it’s about protecting your business and ensuring the safety and enjoyment of your customers. By investing time and effort upfront, you’ll ensure your arcade can focus on what it does best – creating unforgettable experiences for players of all ages!

So, grab your metaphorical permit compass, research your local treasure map, and embark on the rewarding journey of bringing your arcade dream to life!

Step 3: Find the Coolest Arcade Games and Machines that Fit with Your Type of Location

After you’ve done all the work to outline your business goals, you get to do the fun part of choosing the equipment. Of course, your arcade won’t be any fun without unique arcade games and machines. Be sure to look for  new releases , classics, or even  VR arcade games  to stock your arcade. You can even try it before you buy it. Numerous amusement t rade shows and expos worldwide allow operators and owners to get exclusive sneak peeks at the latest games and play them before investing in them.

You have some options when it comes to buying arcade equipment. You can choose between buying new equipment, investing in used arcade equipment, or looking for the ’80s or ’90s classic arcade machines. There has been a trend toward creating classic arcades to take advantage of childhood nostalgia – be aware of everything that goes into keeping older machines up and running, like finding parts and technicians specializing in fixing those machines. There is a community that loves to work on these machines and bring them back to life; if that’s your passion, go for it. However, newer titles would make more sense if you focus more on business.

Having the right mix of games is essential to ensuring profitability. There are three basic categories of typical arcade games, with many more subcategories: Video Games, Redemption Games , and Merchandisers. Allocating a percentage of your space to specific types is necessary for the decision-making process. Check out our post on the different  types of arcade games  for a more detailed analysis.

Step 4: Research Your Competition

Business in this sector is competitive, so make sure you find who the competitors within your area are and what makes them stand out or what they might lack. One of your first goals should be to research their arcades and see how they’re operating and what their assortment is. By analyzing the competition, you can find the best way to attract your target market. For example, you might find that you can improve the arcade lineup and bring in more clients than your competition. 

• Local Landscape:  Identify all arcades within your target catchment area. Big chains, independent gems, even bowling alleys with arcade sections – map them all.
• Target Audience Focus:  Do you understand your ideal customers—families, teens, and esports enthusiasts? Analyze competitor offerings from their perspective.

Dive Deep into Operations:

• Game Assortment:  What games do they offer? Are they cutting-edge titles, retro classics, or a mix? Analyze their variety, popularity, and pricing structure.
• Ambiance and Experience:  Observe their atmosphere. Is it family-friendly, edgy, or focused on esports? How do they manage crowds and maintain cleanliness?
• Pricing and Packages:  Analyze their pricing strategies for individual games, hourly rates, and special packages. Consider offering competitive or unique options.

Identify Strengths and Weaknesses:

• Competitive Advantages:  What makes specific competitors stand out? Unique game selections, innovative themes, exceptional customer service? Identify their winning formulas.
• Vulnerable Gaps:  Find areas where they lack. Limited game variety, outdated equipment, poor service, inconvenient location? These are your potential entry points.

Remember, competitive research is not about copying or undercutting – it’s about understanding the market, identifying opportunities, and crafting a unique arcade experience that resonates with your target audience. By wielding this intel strategically, you’ll turn competition into inspiration, paving the way for your arcade to dominate the scene and light up your customers’ lives.

So, grab your notebook, sharpen your detective skills, and embark on the thrilling quest of competitive research. Your arcade empire awaits!

Arcade Business Profit

How profitable are arcade games.

How much does it cost to purchase arcade games , and how much profit can you expect to make? How many games can I fit in my location? Here, you’ll find some basic industry averages to help set your expectations, but you must understand your specific needs and market.

Average Per Game Budget: $12,000-$15,000 *

Big-time titles and extreme games are more expensive, causing the average price per game to increase. This number is based on a brand new, full redemption arcade. Costs can be reduced to fit the project’s budget using used games. Also, choosing the extremes carefully can help meet the budget requirements.

Average Per Game Revenue: $250/Week *

This is based on a facility achieving average expected volume. Many arcades do far better than industry averages due to higher volume. Average also assumes the facility has committed significantly to family entertainment, with a current game mix and keeping up with prize trends.

Average Per Game Space Allocation: 70 Square Feet *

Extreme games are becoming more prevalent, causing the square footage for games to increase while decreasing the overall game count.

Getting started with equipment can be a financial hurdle, so check out  financing and leasing  options and consider how  used arcade games  can help you jump-start your business.

Opening an Arcade in Your Area

An arcade is a great way to go if you’re trying to develop a business opportunity to bring enjoyment and fun to your community. This has been a basic outline for starting an arcade. If you have any questions or want help getting started, Betson has team members who know the industry inside and out and can help you with the layout & design of your floor plan, game room mix, and more.

Sign up for our  newsletter  to be the first to hear about new releases, product promotions, updates, and more!

*Estimates may vary.

How to Start an Arcade Business

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An arcade symbolizes fun and affordable carefree times for all visitors where young and young-minded alike can enjoy a test of skill against a machine. If you thrive on gaming and providing a form of ageless entertainment, then starting an arcade business may be right up your alley. Although the cost for an afternoon or evening of fun is among the least costly forms of entertainment, startup costs for this type of business typically run high. Here are several things to consider when you are considering opening an arcade business.

Background Activities for Running an Arcade Business

If you are starting an arcade business, you should be a person who loves arcade games. Not just playing them but all aspects of them, as the job includes maintenance, ordering and advertising of arcade games. In fact, your daily routine will probably include repairing out-of-order machines, cleaning machines when people spill stuff on them, acquiring new machines and developing new advertising strategies to help your business stand out from the competition.

Prepare a Business and Marketing Plan 

A business plan is the road map for your business. It sets out what you will do, how you will do and with what resources. You can download a template arcade plan online; this will give you a good starting point for preparing your own plan. Think about how you will make money.

The traditional method involves having customers insert tokens or coins into the machines, but there are other options available such as paying upfront for a certain period of free play, or spending "points" through a card system. Which system you choose depends on the type of games you're going to invest in and the type of customer you want to attract – are your customers likely to carry coins to operate the machines?

Finding Your Customer Base

The niche you target will depend on the type of arcade you run. In general, you can break it down into the following groups:

Traditional arcades. This type of arcade is typically visited by families and young people looking for a social gaming experience. A great example of this type of arcade is the Funspot in Locania, New Hampshire, which

according to the Guinness Book of World Records

was named the largest arcade in the world in 2008. Barcades. This type of arcade is generally visited by people looking for the retro arcade experience of their youth, but who stay for the wide selection of beer. A famous example is Barcade in Brooklyn, New York, which prides itself on its classic video games and craft beers.  Arcade/restaurant combo. This type of arcade is generally visited by both families and co-workers looking to blow off steam and eat in a social environment. A well-known example of this is Dave & Buster's, an American chain that provides a full-service restaurant and arcade entertainment. 

Choosing the Games

Your most important decision is to decide what types of games you will have. While this depends somewhat on the particular niche you are targeting – parents don’t want their young kids playing violent games, for example – there is a general rule to follow. Mixing a variety of games has proven to attract the largest number of customers. The types of arcade games include:

• Video arcade machines. These are the traditional staple of any arcade. Examples include popular fighting games such as Street Fighter IV and classics such as Pac-Man.
• Pinball machines. You can get pinball machines that function mechanically, digitally or using some combination of the two. These games are great for customers who like to immortalize themselves with a high score.
• Ticket redemption games. These types of games allow players to play a skill game for a ticket reward. They then redeem the tickets for various types of prizes. A popular example of this type of game is Whac-A-Mole.
• Interactive games. The idea behind this type of game is to involve other body parts then just your hands. Popular examples include Dance Dance Revolution, Billiards and air hockey.
• Merchandise games. This type of game provides the player the potential of winning a prize immediately upon completing the game. A familiar example of this genre is the crane and claw machine. 

Setting Up Your Space

Both location and floor plan are important for your business. Choose a location that is highly visible with a lot of foot traffic such as on a boardwalk or in a mall. Basic guidelines to follow when planning your arcade space include:

• Estimate about 50 square feet per arcade game
• Leave a minimum of two to four feet in front of your games open so that people can stand in front of the machine.
• Bunch games side to side or back to back to save space.
• Group your machines based on the type of game such as arcade games, ball-shooting games and redemption games, as well as based on genre such as action, racing and fighting games. This helps your customers find the types of games that they want to play easily.

Arcade Business Licensing Requirements

In most states, you are required to obtain a license specifically for running arcade games. For example, in New York, you are required to get an Amusement Arcade License if you will be running 10 or more arcade machines. If you will be selling food, you need to be licensed by your local health department. If you plan to play music in your arcade, look into getting a blanket music license that allows you to play music from a large catalog of artists.

• The Really Useful Information Company: How to Start an Arcade
• Mashable: The 20 Coolest Arcades in the World
• Medium: How to Start an Arcade Business
• Primetime Amusements: Building Your Own Arcade Pt. 1: Types of Arcade Games
• NYC: Amusement Arcade License
• SBA: Write a Business Plan
• If you are concerned about how to conduct your market study, hire a professional to do it. Since a large financial investment is required, it is worth starting with everything in your favor, including a market survey to back up your plan.
• Ask your soon-to-be commercial and residential neighbors how they feel about having an arcade in the area. Others who live and work in the area should be convinced the business is an asset and not a curse or business could be affected.

Michael is a writer in various subjects. He is a mechanical engineer and freelance writer, having earned a Bachelor of Science in Mechanical Engineering from Washington University in St. Louis. His articles have appeared mostly online.

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Arcade Business Plan Template [Updated 2024]

Arcade Business Plan Template

If you want to start an arcade business or expand your current arcade business, you need a business plan.

The following Arcade business plan template gives you the key elements to include in a winning Arcade business plan.

You can download our Business Plan Template (including a full, customizable financial model) to your computer here.

Below are links to each of the key sections of your Arcade business plan: I. Executive Summary II. Company Overview III. Industry Analysis IV. Customer Analysis V. Competitive Analysis VI. Marketing Plan VII. Operations Plan VIII. Management Team IX. Financial Plan

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Arcade Business Plan Home I. Executive Summary II. Company Overview III. Industry Analysis IV. Customer Analysis V. Competitive Analysis VI. Marketing Plan VII. Operations Plan VIII. Management Team IX. Financial Plan

How to Open an Arcade

Opening an arcade can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful arcade.

Importantly, a critical step in starting an arcade is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here .

Download our Ultimate Business Plan Template here

15 Steps To Open an Arcade:

• Choose the Name for Your Arcade
• Determine the Type of Arcade You Will Launch
• Develop Your Arcade Business Plan
• Choose the Legal Structure for Your Arcade
• Secure Startup Funding for Your Arcade (If Needed)
• Secure a Location for Your Business
• Register Your Arcade with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Arcade
• Buy or Lease the Right Arcade Equipment
• Develop Your Arcade Marketing Materials
• Purchase and Setup the Software Needed to Run Your Arcade
• Open for Business

1. Choose the Name for Your Arcade

The first step to opening an arcade is to choose your business’ name.  

This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your arcade:

• Make sure the name is available . Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
• Keep it simple . The best names are usually ones that are easy to remember, pronounce and spell.
• Think about marketing . Come up with a name that reflects the desired brand and/or focus of your arcade.

2. Determine the Type of Arcade You Will Launch

The next step is to determine the type of arcade you will launch. The four main types of arcades are:

• Traditional arcade : These are arcades that feature classic games like Pac-Man, pinball machines, skeeball and more.
• Escape room arcade : Escape rooms have become very popular in recent years. They typically involve teams of people solving puzzles and completing tasks in order to escape the room.
• Simulator arcade : Simulator arcades feature virtual reality experiences, flight simulators and racing simulators.
• VR arcade : VR arcades offer immersive virtual reality experiences for players to enjoy.Once you have chosen the type of arcade you want to launch, you can move on to developing your business plan.

3. Develop Your Arcade Business Plan

One of the most important steps in opening an arcade is to develop your arcade business plan . The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.

Your business plan should include the following sections:

• Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your arcade.
• Company Overview – this section tells the reader about the history of your arcade and what type of arcade you operate. For example, are you a traditional arcade, VR arcade or escape room arcade? 
• Industry Analysis – here you will document key information about the arcade industry. Conduct market research and document how big the industry is and what trends are affecting it.
• Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing services like the ones you will offer?
• Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
• Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
• Product : Determine and document what products/services you will offer 
• Prices : Document the prices of your products/services
• Place : Where will your business be located and how will that location help you increase sales?
• Promotions : What promotional methods will you use to attract customers to your arcade? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
• Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
• Management Team – this section details the background of your company’s management team.
• Financial Plan – In this section, you will document the financial projections for your arcade business. This should include your sales and revenue projections, cash flow statement, and your expense budget, detailing the arcade business startup costs :
• What startup costs will you incur?
• How will your arcade make money?
• What are your projected sales and expenses for the next five years?
• Do you need to raise funding to launch your business?

Finish Your Business Plan Today!

4. choose the legal structure for your arcade.

Next you need to choose a legal structure for your arcade and register it and your business name with the Secretary of State in each state where you operate your business.

Below are the five most common legal structures:

1) Sole proprietorship

A sole proprietorship is a business entity in which the owner of the arcade and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.

2) Partnerships

A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to open an arcade together. The partners share in the profits and losses of the business. 

The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.

3) Limited Liability Company (LLC)

A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for an arcade include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.

4) C Corporation

A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for an arcade is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.

5) S Corporation

An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.

Once you register your arcade, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.

5. Secure Startup Funding for Your Arcade (If Needed)

In developing your arcade business plan, you might have determined that you need to raise funding to launch your business. 

If so, the main sources of funding for an arcade to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in an arcade that they believe has high potential for growth.

6. Secure a Location for Your Business

Having the right space can be important for your arcade.Some of the factors to consider when selecting a location include how many people will visit your arcade, how much space you need for equipment, how much foot traffic there is in the area and how far away it is from competitors. You should also look into any zoning laws that may affect the location.

To find the right space, consider:

• Driving around to find the right areas while looking for “for lease” signs
• Contacting a commercial real estate agent
• Doing commercial real estate searches online
• Telling others about your needs and seeing if someone in your network has a connection that can help you find the right space

7. Register Your Arcade with the IRS

Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.

Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.

8. Open a Business Bank Account

It is important to establish a bank account in your arcade’s name. This process is fairly simple and involves the following steps:

• Identify and contact the bank you want to use
• Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
• Complete the bank’s application form and provide all relevant information
• Meet with a banker to discuss your business needs and establish a relationship with them

9. Get a Business Credit Card

You should get a business credit card for your arcade to help you separate personal and business expenses.

You can either apply for a business credit card through your bank or apply for one through a credit card company.

When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.

10. Get the Required Business Licenses and Permits

There are a few business licenses and permits that you may need for your arcade. The most common ones include a business license, a zoning permit and a sales tax permit.

A business license is generally required for all businesses. This license allows you to operate your business legally. 

A zoning permit is generally required if you’re planning to change the use of the property where your arcade will be located. 

A sales tax permit is generally required if your arcade sells taxable items or services. This permit allows you to collect and remit sales tax to the state.

Nearly all states, counties and/or cities also require:

• Food Service, Processing and/or Warehouse Licensing : to ensure safe food preparation
• Fire Department Approval : a process by which the local fire department reviews and approves the installation of a fire alarm system.

Depending on the type of arcade you launch, you will have to obtain the necessary state, county and/or city licenses.

11. Get Business Insurance for Your Arcade

Arcade business insurance is a must. It can protect your business from a variety of risks, including property damage, liability, and injuries that occur on your premises.

There are a few different types of business insurance that you may want to consider for your arcade. These include:

Property Insurance : This insurance can help protect your arcade from damage or theft.

Liability Insurance : This insurance can help protect you from lawsuits if someone is injured on your premises.

Injury Insurance : This insurance can help pay for medical expenses if someone is injured at your arcade. 

Business Owner’s Policy : A business owner’s policy (BOP) combines property and liability insurance into one policy. This can be a convenient option for small businesses. 

It’s important to work with an insurance agent to find the right coverage for your arcade. They will be able to assess your specific needs and find a policy that fits your budget.

Other business insurance policies that you should consider for your arcade include:

• Workers’ compensation insurance : If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
• Business interruption insurance : This covers lost income and expenses if your business is forced to close due to a covered event.

Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs. 

12. Buy or Lease the Right Arcade Equipment

When opening an arcade, there are a few key pieces of equipment that you will need. This includes:

• Arcade Games : Of course, you will need a variety of arcade games for your guests to play. Make sure to choose games that are popular and will attract guests.
• Pinball Machines : Pinball machines are a classic arcade game and remain popular to this day.
• Skee Ball : This classic game is always a hit with guests of all ages.
• Candy Machine : A candy machine is a great way to keep your guests fueled up while they play games.
• Drink Machine : A drink machine is also a great way to keep your guests hydrated while they play games.
• Napkins, Cups, and Straws : Be sure to stock up on napkins, cups, and straws so your guests can stay clean and hydrated. 

You can buy or lease most of this equipment from various suppliers. Make sure to shop around and compare prices before making a purchase.

13. Develop Your Arcade Marketing Materials

Marketing materials will be required to attract and retain customers to your arcade.

The key marketing materials you will need are as follows:

• Logo : Spend some time developing a good logo for your arcade. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
• Website : Likewise, a professional arcade website provides potential customers with information about the services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
• Social Media Accounts : establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your arcade.

14. Purchase and Setup the Software Needed to Run Your Arcade

You will need to purchase arcade game software in order to run your arcade. This software allows you to manage your arcade games, track players, and more. There are a variety of software options available, so be sure to choose one that meets your needs.

Research the software that best suits your needs, purchase it, and set it up.

15. Open for Business

You are now ready to open your arcade. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.

How to Finish Your Arcade Business Plan in 1 Day!

Don’t you wish there was a faster, easier way to finish your Arcade business plan?

With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

How to Open an Arcade FAQs

Is it hard to open an arcade.

No, it's not hard to open an arcade. If you follow the steps above, you should be able to start your arcade without too much difficulty.

How can I open an arcade with no experience?

Opening an arcade may seem daunting, but with the right resources, it can be a fun and profitable endeavor. 

The best way to open an arcade with no experience is to start small. You can offer your services to friends and family members, or to local businesses. Once you have a few clients, you can then start marketing your business more aggressively.

What type of arcade is most profitable?

There are many different types of arcades that can be profitable. It all depends on what kinds of games and services you offer. For example, if you offer classic arcade games, you may be able to attract an older crowd who is looking for a nostalgic experience. On the other hand, if you offer cutting-edge VR games, you may be able to attract a younger crowd who is looking for the latest and greatest gaming experience. Ultimately, the type of arcade that is most profitable will depend on the needs and wants of your target market.

How much does it cost to open an arcade?

Opening an arcade can be an expensive proposition, as there are a number of costs associated with getting your business up and running. The startup costs to open an arcade range between $10,000 - $50,000 depending on the size and scope of the arcade. This cost will include purchasing arcade game software, setting up social media accounts, leasing a space for your business, hiring staff, and other items.

What are the ongoing expenses for an arcade?

The ongoing expenses for an arcade can vary depending on the size and scope of your business. However, some of the most common expenses include rent, salaries, marketing, and supplies. Other expenses to consider include utilities, staff training, and any other operational costs related to running your arcade. 

In addition to these expenses, you'll also need to factor in the cost of replacing or upgrading arcade games and equipment on a regular basis.

How does an arcade make money?

Arcades make money by charging customers to play games. They may also offer food and drinks, as well as other services, to increase their profits. In addition, arcades can generate revenue by renting out their space to other businesses or by selling advertising space.

Are Arcades Profitable?

Arcades can definitely be profitable businesses! They attract people of all ages who love games and fun. With the right mix of popular games, a good location, and exciting themes, arcades can make good money. They are also great places for parties and events, which can bring in extra income. The key is to keep the games fresh and the atmosphere exciting, so people want to come back again and again. Remember, a successful arcade is all about giving customers a fun and memorable experience!

Why do arcades fail?

Arcades can fail for a number of reasons, but often it boils down to a few key factors. 

One of the main reasons that arcades fail is a lack of planning. This can include not having a detailed business plan, not doing research on the industry, and not targeting the right customers.

Another reason is a lack of marketing and sales skills. This can include not creating a sales process and not have a clear and strong value proposition.

The last main reason is a lack of financial management skills. This can include not having a realistic budget, not tracking expenses, and not investing in the business.

Who are key players in the arcade market?

The arcade market is made up of a variety of different players, including small businesses, large enterprises, and even individuals.

Some of the key players in the market include:

• Galloping Ghost Arcade
• Dave & Buster's
• Chuck E. Cheese's 
• Stern Pinball, Inc.

However, there are many other players in your specific target market, and it is important to research the market to identify the key players that may have the most direct influence on the success of your business.

How much should I charge for my arcade services?

Arcade fees can vary depending on the type of arcade services being offered, as well as the size and scope of the project.

However, some common arcade fees include:

• Hourly rate - $20 - $100
• Per game fee - $1 - $10
• Monthly subscription fees - $20 - $50

The best way to determine the right fee for your arcade services is to research the rates of similar businesses in your industry, and to also consider the value that you will be providing to the client.

Other Helpful Business Plan Articles & Templates

Sample Arcade Business Plan Template PDF

Arcade business plan sample.

If you wish to start an arcade business, you’ll need a plan.

Your business plan will serve as a blueprint towards the actualization of the idea, and too often, people face difficulties drafting one. In other words, coming up with a gaming business plan isn’t as easy as it sounds.

In reality, knowing what needs to be included in the plan and how to develop each of the sections is where a lot of people fail. This arcade Business Plan provides critical guidance to entrepreneurs facing such difficulty.

Need to write a plan for your venture? Download a FREE Business Plan PDF Sample to develop a template for your own startup.

With this, you’re able to follow and understand how you should develop your business plan.

The Key Sections you can’t do without

Writing a great plan requires understanding what needs to be included.

Also, it must follow a basic pattern or structure. In other words, certain components are critical to the outcomes obtained. These include the executive summary, company description, as well as the products & services.

Other components of a good plan include market analysis, strategy & implementation, organization & management team, as well as financial plan & projections.

With these mentioned, you’ll have to know how each section needs to be developed or what needs to be included. Detailed examples are provided below;

i. Executive Summary

Arguably the most important section of your arcade business plan, the executive summary condenses the entire document into a mini plan.

In other words, it gives a highly summarized version of the plan to allow for easier and faster comprehension of what’s in the main plan.

This is important because investors will require an easily digestible version of the plan that highlights the key sections needed to determine its viability.

Also, you want to keep your audience interested and glued to the plan. Ultimately, you want them to seek further details about the business.

Nothing interests investors like a game business idea that sounds viable.

Although the executive summary briefly discusses all the other sections, additional details are provided such as the business name & location, the products & services, mission & vision statements, as well as the specific purpose of the plTo introduce cing your arcade business to your audience, you’ll have to state its an.

It would be best if you explored all the procedures involved in choosing a great name.

As mentioned above, the location of the business also matters. This helps tell your audience how its location will likely impact on sales.

What services or products does your arcade business provide? Every business is established to provide a service or a product and yours shouldn’t be any different.

Here, provide a rundown of services without getting into too much specifics as there’s a whole section for that in the main body of the plan.

Your executive summary section won’t be complete without the mission and vision statement.

The mission statement captures the essence of your business’s goals as well as stating the purpose it serves. It basically tells the world why the business exists.

The vision statement on the other hand gives a clear and definitive description of your business’s aspirations. This is in addition to the kind of impact it aims to create.

It should be inspiring enough to keep your workforce motivated towards attaining the bigger goal.

What’s the specific purpose of your arcade business plan?

This is one area you’ll need to clarify to your readers. By stating the specific purpose, a clear understanding of why you take the actions you take is had.

ii. Company Description

Company description covers a lot of key details about how the company operates.

Here, several aspects are covered such as a summary of short and long term business goals, as well as its legal structure. Your company description should also clearly state how you intend to make a profit as a business.

Provide a brief history about your operations (for existing or established arcade businesses), in addition to the nature of business as well as the demands or needs you intend to meet.

You’ll also have to include a summary of company growth with financial or market highlights added.

iii. Products & Services

The details you earlier left out about your services and products in the executive summary section need to be provided in more detail here.

Also important is the service or product costs, the expected net revenue from sale of products and services, as well as the benefits derived by customers.

Information on services and products still in the research and development stages will also need to be provided. What’s the market role of your products or services?

Plus what clear advantages do they have over those from your competitors? If there are any relevant trade secrets, patens, or copyright, you should add them here.

iv. Market Analysis

Under the market analysis section, you want to demonstrate your understanding of the industry to your audience.

This requires carrying out a ton of research activities which involves a lot of wYou’llou’ll need to provide a sketch of target customer segments with size and demography to demonstrate such knowledgephics.

Identify your competitors and give a detailed assessment of their weaknesses and strengths. Also, a historical current and projected marketing data for your arcade services and products need to be included.

Give an industry description and outlook with supporting statistics.

v. Strategy & Implementation

The sales and marketing strategies adopted for your arcade business need to be summarized and implemented with the help of an operating plan.

This should contain a clear explanation of how you intend to promote your business to your client and plan to enter the market.

Also, how will your business function? Give information on pricing, costs, and promotions as well. What more? You’ll have to include information on your sources of labor and the number of employees you’ll be hiring.

vi. Organization & Management Your Arcade Business

The organization and management ness are crucial to its success. You’ll need to present an organizational chart with departments and critical emplo to your audiences.

Give a profile of the owner, the management team, and advisors.

vii. Financial Plan & Projections

The financial plan requires the input of a professional in working out key financial statements.

These include historical financial data, realistic prospective financial information, as well as a brief analysis of your financial data.

With all of these points added to your arcade business plan, it should be ready for use and can be presented to investors or used for strategy purposes.

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Building Your Own Arcade Pt. 3: Planning and Executing

In the spirit of ending our series of articles about setting up your own arcade business on the right note, we’re here today to facilitate a checklist, or a cheat-sheet, if you will, of the various things you need to consider in order to get started.

On previous occasions , we talked about the different types of arcades games available, what works for most arcade establishments, as well as the appropriate locations to place your business, and the types of games you could feature on it. With this article, our aim is to recap on the topics we’ve touched until now, as well as add a couple extra nuggets of information to make your lifelong dream of opening your arcade into reality, in a simple list format.

As simple as the process may sound (condition a room, set up a few machines), building an arcade business actually takes a lot of planning and know-how. Said process can be divided into two phases: the instruction and planning phase and the execution phase.

Instruction & Planning

This phase should cover everything from getting to know the types of arcades, the industry’s best practices and rules of etiquette, the feasibility of the market you want to build in, and all the other elements related to the construction, space planning, interior design, and so on. Sounds complicated, huh? Well, that’s actually because it kinda is. Most entrepreneurs don’t just “luck out” and score big with their business without actually knowing what they’re doing.

But don’t worry if you feel stumped at first, because that’s where we come in. Our team of knowledgeable agents are available to answer any of your queries, as well as provide valuable insight on the many factors you need to consider in order to get started with your arcade establishment. Our PrimeTime Amusements Family Entertainment Center consultants are prepared to share with you the ins and outs of the industry, and to unerringly guide you through the ropes, in hopes of granting you a head-start with your business. Our team is qualified to answer questions in all the areas mentioned above, as well as assist in you in others, such as the number of machines you should acquire, the types of games in relation to your target demographic, the costs per round, and so much more.

One other important element in this phase is the selection of the theme that will set the mood in your arcade. Be it western, eastern, kid-themed, or tailored for teens and adults, here at PrimeTime Amusements, we have a skilled custom theming and design team comprised of an art director and several talented sculptors that can help you create any type of architectural design, as well as props and other set pieces to bring the theme of your thoughts into physical reality.

Either way, you will want to take your time in finding the best venue that has the right amount of rent, space, and foot traffic that will translate into a better chance for success.After you settle on a location, and theme, then comes the execution phase.

This is where the fun really begins. This phases covers everything from gaining the proper zoning approvals, putting floor plans and designs into motion, furnishing the arcade, and advertising it to the masses. If the previous phase was about getting to know the industry and amassing knowledge, then this phase is the one where you actually put said knowledge to the test. A good business plan makes for a good business, and a good business leads to great profits, which makes all your endeavors well-worth the effort.

As things stand, this part of opening your business is more straightforward; all you need to do is follow whatever you have planned to the letter, while being prepared for ‘unforeseen’ circumstances (shipping delays, permit delays, products suddenly unavailable, etc). Between good planning and willing to be flexible towards those things outside of your control, you’ll have your arcade business up and running in no time.

For the people keeping track at home, you may have noticed that starting your first arcade business is by no means an easy feat. That said, it can be broken down into smaller tasks that are easier to digest and perform. In the following paragraphs, you will find a set of steps that you need to take in order to get your business running. I think it goes without saying that your personal experience may vary. However, these are the hoops that most budding entrepreneurs will have to jump through:

1. Settle upon a location for your new arcade

I think we’ve already stressed enough the importance of proper location in relation to the success of your business. Arcades, as well as any other establishments thrive because of the people that come to visit. In order to secure a good customer base, we need to build our business in places where people, especially younger kids and teens, tend to frequent. School neighborhoods, the proximities of shopping malls, and even commercial or retail zones (such as near a Walmart) are great places to build your arcade.

2. Acquire the proper zoning approvals and permissions

Not every business requires zoning approvals to be built. However, just to be sure, you should always consult with your zoning board before proceeding to build your arcade. This is especially important for you, since Family Entertainment Centers used to have troubles gaining approval in the past, so odds are that you will need to acquire the necessary permissions first. Note that every city/county/state has different laws regarding business creation & establishment. In certain instances, this may require the consultation of a lawyer in your area who is familiar with local business laws & regulations. We recommend that you take your time here to get it right.

3. Creating a business plan

This is hands-down one of the most important steps in the whole process of opening your arcade business, especially if your new establishment budget exceeds the million dollar mark. In these cases, a feasibility study is imperative to determine whether your project will be profitable and be able to make up the investment in a plausible time period. Said feasibility studies are worth a pretty penny to perform, but are well-worth the investment for a couple of reasons:

First, they can actually let you know if your project goals are achievable, and that the benefits will outweigh the costs in the long run. And second, a proper feasibility study can help you to net investors, either private or government-backed, which leads us to our next step.

4. Securing the necessary funds to set your plan in motion

Opening your arcade business will take anywhere from a moderate amount of money, to a sizeable investment of funds; but you already knew that, didn’t you? What you may not know is where to procure said funds in order to begin constructing your business. This is where your business plan and feasibility studies really shine. With these papers in hand, you can sit down with your local bank or other private agents, and persuade them to give you a loan. In most cases, you will have to pay back with interest, while others would lend you the money in exchange for associate status and receive part of the profits of the business.

If you try and approach an investor or a bank without showing that you’ve put in the efforts to study the industry, chances are they will not take you seriously. This runs the risk of “burning a bridge” with a potential investment source that could otherwise be a part of your success.

5. Drawing up the floor plan, theme, and design of your arcade establishment

This is the backbone of your arcade. These blueprints will dictate how your arcade establishment will look after it’s fully furnished and equipped. Consequently, a floor plan must always be drawn up with the assistance of experts in the industry, which we’re more than happy to provide . Along with floor planning, we can also assist you with the design, construction, and applying the theme of your business.

6. Building your business based on the previously agreed upon plans

This one is pretty self-explanatory. The most important part about this step is following the designs and blueprints to the letter in order to avoid unpleasantries or conflicts down the line.

7. Acquiring and Installing furnishings and machines

After finishing the construction, all that’s left is to decide which types of machines to populate your arcade with. As we’ve mentioned on other articles, you may choose from a selection of arcade games, redemption games, and instant prize games. If you’re pressed for space, you might need to settle with the smaller cabinets and machines. On the other hand, if you have plenty of room to spare, you might even be able to furnish your establishment with big amusements, such as simulators or even large rides. But before you start buying machines all willy-nilly, please consider the possibility of acquiring card-swipe systems instead of their coin-based counterparts. The former can really help you forgo the security issues of coin-operated machines, as well as provide a wide slew of benefits, such as remote price adjustment, and real-time machine statistics to determine which games are the most profitable across the board.

8. Creating an advertising and marketing strategy to get the word around about your new business

After all is said and done, you will still need to get the word around about your new arcade. Some of the most effective advertising strategies actually come from direct interaction with the target demographic, such as TV ads, posting flyers on popular places, or even throwing in special discounts via coupons. Creating brochures with all the information about the services your business offers, as well as engaging in cooperation with local schools or other organizations can also work wonders to let your business be known throughout the neighborhood.

In our online world, it is also important to create a presence on the internet. This means an official website with pictures of the venue, lists of the games and other entertainment options you have, pricing and any other details you might want to share. Websites are not expensive to create and run. It is also wise to use those “free” social media hubs to help spread the word – whether that is Facebook, Twitter, Youtube, Google +, Yelp, MeWe, Vid.Me, etc. Use good pictures and/or video with these sites and it helps customers find you.

Keep in mind that, despite being a fairly convoluted process, you don’t have to walk this path by yourself. Our team of FEC consultants are qualified to help you in every step of the way, so that you can successfully open your arcade business as smoothly as possible. At PrimeTime Amusements we’re the nation’s leading provider of arcade sales and rental solutions. If you have any queries or concerns regarding the process of opening up your very own business, or simply want to ask about a machine in general, feel free to give us a call at 1.800.550.0090, or drop by and visit us at 5300 Powerline Rd, Suite 210, Ft. Lauderdale, Florida.

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• How to Start an Arcade Business

If you are looking to start an arcade business , the new amusement entrepreneur must first understand the local market opportunity, the demography of that local market, and just as important, his or her own arcade business goals. There are many options to consider when looking to start your arcade business, including the arcade games you will need for your target customers, and the type of game play your arcade business will offer. This includes different arcade machines, redemption games (ticket games) and the play value of each of these game types.

Start an Arcade Business

Step 1: It all starts with a business plan

Probably not what you wanted to hear first, but the unfortunate truth to starting a successful arcade business starts with a good, accurate business plan including an analysis of your market potential. From your plan, everything else will come together. What machines, how many, your best location, startup costs, attendance and an expected return on investment.

Step 2: Use your plan to source the best arcade machines and redemption games

With your plan complete, it's finally time for the fun stuff. Sourcing the best, coolest games and machines for your location and demographic profile, along with the design, layout and build-out of your ideal location. 

Step 3: Your Ideal Location

We've all heard it before... location, location, location. In terms of an arcade game room business, finding the "ideal" location may not mean the best location, but the right location. Within easy reach of your target market, at the right lease rate, terms and available space to accomodate your guests.

When starting an arcade business , there are several things to keep in mind. Your arcade game room is a player in the overall family fun center attraction mix. Depending on your fun center business goals and your target market demographics it might be a key player, or it might just be a necessary component to the long term success of your business. Make no mistake, arcade game machines are still in fashion and profitable in the right location, with the right mix and game room design.

The point of this conversation is to open the eyes of the new arcade startup to the bigger picture. Old style, stand-alone video arcade game room just doesn't have the pull, or the community attraction they once had. However, a successful arcade business has become an integral component of your overall attraction mix and the fun center or indoor party center business itself.

Family fun center businesses are smart to include an arcade game room, if it makes sense for their target aged customer and local demographic. For a younger indoor party center demographic (typically 10 years and under), video arcade games are not as popular as redemption games . Secondly, mothers are the primary buyer for this younger demographic and justified or not, often see the content of these video arcade games as violent and destructive. If on the other hand, your market includes tweens, teenagers and young adults, a video arcade game room is expected and will do well with the right arcade game mix and game room design.

Arcade Business - Design for Profit

For example, you need quick play games, novelty games, merchandise and redemption games, shooting games, driving games and traditional pinball games. If you are going to be catering to a younger demographic you may also want to include kiddie games.

How to Start an Arcade - Space Planning

Here are some base rules of thumb when looking at designing a successful arcade game room:

• Use an estimated 50 sqft of floor space per game (100 games = 5,000 sqft).

• You can bunch games up side by side, or back to back to save space.

• Video arcade games need approximately 4 feet clearance in the front of the game.

• Basketball or SureShoot type games require 6 feet of clearance in the front of the game.

• Redemption games can vary dramatically however, a minimum of 2-3 feet in front and 1-2 feet on each side.

• If you are using multiples of the same type of games or titles, you can push these games side-by-side to reduce the amount of space required.
• For larger, multiplayer arcade coin games or redemption games that can be played by 4 to 6 players at a time, this type of cabinet game should be used as an eye-catcher and placed in a visible spot with a minimum of 4-6 feet around the entire game.

Your family fun center, indoor party center and other amusement attractions are a fun place for families, tweens, teenagers and groups of friends to go play and spend some time (and money) together.
 There are a wide assortment of video games, arcade machines and coin operated games that can help make this experience diverse, entertaining and time well spent for your guests.

To develop a successful arcade game room you need to offer your guests a good variety of game-play and play-ability, from a diverse set of arcade machines and redemption games.

 When designing your game room, the game mix and game room layout are the key areas of planning for long term success in your attraction business. As with space planning for your amusement fun center in general, providing your guests with a visually pleasing and traffic friendly layout is the corner stone of arcade game room success. At a glance, your fun center guests should be able to quickly feel enticed to enter the room and select an arcade game to start playing.

Arcade Game Room - Final Thoughts

Once your guests find games to play, how they play those games are just as important as which arcade machines and games they play. Some games are multi-person games and require a lot more space than a single pinball machine would need. Popular games tend to draw a crowd, and having a visible location for such games, with enough surrounding space to accommodate those crowds is also important.

When looking to purchase arcade machines for your business here are a few key things to keep in mind;

• Your target demographic - who are your customers, and what ages are they? This will help you to determine the ultimate make-up of your game selection, arcade games vs. redemption games.
• The amount of floor space you can devote to a your game room. As mentioned above, arcade machines and interactive games vary in size and can require a lot of square footage if you intend to offer 60-70 games.
• Consider good crowd control and space management when placing games. Focus on visibility and popularity - bringing the hot games to the front of your game room will encourage play and guest participation as friends watch friends play.
• Use lighting to enhance the room and direct guests focus to specific arcade machines that are proven revenue earners.

Spend the time to plan and design a good game room with the right game selection and space planning now, and it will help draw strong repeat visits and revenue opportunities for your arcade business startup today and over time.

As a point in our general experience, for many entrepreneurs we speak with, the idea of an arcade takes shape as a multi-attraction 'fun center'... or party center - if your goal is to start an arcade, you may very well be looking at starting a fun center business with an arcade game room. The reasons for this are many, check out the article Video Arcade Game - A Business in Decline to see how and why the arcade business is changing. If you have further interest and would like a no-obligation, free chat about the business and getting started, feel free to book some time with us:  Fun Center Academy - Free Advice

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• Writing a Business Plan - 60 Second Guide

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Arcade Business Plan and SWOT Analysis

Arcade Business Plan, Marketing Plan, How To Guide, and Funding Directory

The Arcade Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start an Arcade business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.

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Despite the fact that many people now own a number of gaming systems, the demand for people wanting to go to arcade has increased substantially. This is primarily due to the fact that people enjoy the large-scale arcade games that are made given that they provide a different form of enjoyment as it relates to playing video games. Additionally, many arcades have geared their operations towards a more adult audience. In fact, most arcade to launch these days are not geared towards kids but rather adults. Many arcades are able to generate substantial income by operating in a capacity similar to that of the sports bar. In most major metropolitan areas, the number of arcades that have been developed has increased substantially with many of these businesses obtaining liquor license so that they can provide alcoholic beverages to the general public. These places often act as a meeting place for friends to hang out while playing a number of both old and new video games. The primary draw to these locations, beyond the sale of small food plates and alcoholic beverages, is a strong sense of nostalgia that comes from playing games that an individual used to play when they were much younger.

The startup cost associated with the new arcade are considering moderately low and these businesses can be started for as little as $50,000 all the way up to about $200,000. If the arcade is going to acquire a liquor license than these fees may increase substantially given that some jurisdictions charge tens of thousands if not hundreds of thousands of dollars for a liquor license. However, outside of this expenditure – the acquisition of both old and new arcade game units is moderately low. Additionally, there are now a number of specialty leasing companies and rental firms that provide arcade games for monthly fee rather than via purchase. As such, one of the ways that the startup cost associated with the new arcade can be ameliorated is through the use of leasing or renting these machines.

Given the extremely high gross margins from arcade game usage, sales of alcoholic beverages, and sales of food – almost all financial institutions are willing to provide a business loan in order to get a new arcade off the ground. Of course, and arcade business plan is going to be required and a three-year profit and loss statement, cash flow analysis, breakeven analysis, balance sheet, and business reaches page is going to be a required that minimum. It should be noted that some financial institutions now require that a full five-year financial model is done instead of the standards three year financial model. In addition to the anticipated profit and loss statements, a full demographic analysis should be developed showcasing the anticipated number of patrons of the arcade will have from the onset of operations. This includes examining the population size, population density, median household income, percentage of people under the age of 40, and percentage of people that have an extensive interest in arcade games and related technology. One of the nice things out in arcade is that it does appeal to a broad range of demographics. The business plan should also have a substantial amount notation as to whether or not the arcade will focus on an adult audience or a kid audience. If the arcade is going to be specific for children than an examination of the percentage of people under the age of the 18 should be included as well. This should also examine the potential revenues that can be generated from event hosting with a specialized focus on children’s parties.

An arcade SWOT analysis should be produced as well in conjunction with the business plan and the marketing plan. As it relates to strengths, the startup costs associated with the new arcade are extremely moderate and gross margins are very high. This is especially true of alcoholic beverages are going to be served on site. In times of economic recession, arcades typically are able to remain profitable and cash flow positive at all times given the fact that high gross margins are generated from arcade game usage. Small food plates as well as drinks can also substantially boost the profits of the business.

For weaknesses, these businesses typically thrive only in major metropolitan areas given that they have the population density to support a arcade. People frequently enjoy playing video games on home-based consoles – and this is the primary competitor that arcades have to deal with these days. Additionally, if alcoholic beverages are being served on site and there always risk regarding underage drinking and other liabilities that stem from this type of operation.

One of the ways that arcades frequently expand their operations is by hosting tournaments and specialized events including those that include the use of traditional consoles. Additionally, many arcades simply expand by establishing secondary and tertiary locations once the initial location has become profitable. One of the other things that can be done in order to boost the revenues of the business is like having ongoing corporate events, birthday events, and other gatherings which can generate a substantial amount of revenue not only from event hosting fees but also from the food and beverages will be served to patrons.

There are no known threats that would impact the way that these companies do business. One of the keys to thriving in this industry, in order to stay ahead of competition, is to continually provide new arcade games and experiences as it relates to owning and operating one of these businesses. Altered reality and virtual reality games are becoming popular, and many arcade entrepreneurs have taken integrating this new technology into their locations.

An arcade marketing plan needs to be developed as well in order to make sure that the business has as much visibility as possible from the onset of operations. Many arcades acquire a large-scale retail facility from which to conduct their operations, and this facility should have a substantial amount of signage that allows the business to be seen from major highways within the target market.

As always, an expansive presence on the Internet is going to be required for new arcade given that many people now find specialized businesses via Internet searches. Most importantly, a massive presence on social media should be developed so that the business can be quickly found. As many people treat gaming as a way of life – the usage of social media will allow many individuals have an interest in video games to discuss the location and make plans to go in check it out. This is going should be the foremost way in which the arcade conducts its marketing operations. A presence on platforms such as FaceBook, Twitter, Instagram for photos, LinkedIn, Reedit, and other major platforms including Google+ should be included as well in order to boost the visibility of the business once the grand opening has been started. In many cases, especially when arcade serve alcoholic beverages, it will allow patrons to use the arcade for free or at a very discounted cost in order to ensure that they are able to familiarize themselves with the location. This is one of the quickest ways in order to ensure repeat business.

Beyond a large-scale presence on social media, a presence via a proprietary website should also be developed. This includes showcasing the arcade location, current games that are available for use, food menus, drink menus, hours of operation, and preliminary pricing information. In some cases, functionality a letter that allows for people to enroll in tournaments or become members of the arcade can be integrated as well. Creating a membership program for a new arcade is also one of the fastest ways to ensure these businesses are able to remain profitable. Usually, a subscription is purchased in order to use the arcade an unlimited amount of time. This frequently allows for the business to remain profitable in any economic climate given that a monthly charge is made to each customer.

Arcades are can continue to be one of the mainstay entertainment industries within the United States. More and more people have an interest in gaming and it is no longer something that is simply relegated to younger people. Adults that grew up in the 80s and 90s typically want to enjoy the nostalgia and the game play is associated with an arcade. As such, these businesses are always going to be able to remain profitable and cash for positive especially if the arcade implements a subscription model into its operations.