Escape Room Business Plan
If you want to start an escape room or expand your current escape room, you need a business plan.
The following escape room business plan template gives you the key elements to include in a successful escape room business plan.
Sample Business Plan for an Escape Room
I. Executive Summary
Business Overview
[Company Name] located at [insert location here] is a new escape room focusing on providing a range of puzzles and adventure-based games. The Company will offer an entertaining problem-solving experience in a relaxed, friendly, and safe environment.
The Company’s primary service includes providing a range of puzzles, riddles, adventure games, mystery rooms, and challenges, all in one place. The Company aims to become the number one adventure destination for consumers in [location].
Products Served
The Company will provide the following services to its customers:
- Puzzle games
- Role-playing games
- Military operations missions
- Questing
- Scavenger and Treasure Hunts
- Augmented Reality and Virtual Reality Gaming
Customer Focus
[Company Name] will primarily offer its service to the residents living within a 20-mile radius of the business location. The escape room will be located in a growing community of young professionals. As these types of adventure activities are favored by Gen Z and Millennials, the escape room will enjoy a robust market.
Management Team
[Company Name] is a family-owned escape facility that is owned by [Founder’s name] and his immediate family members. The business will be managed by [Founder’s name] and his son [insert name]. [Founder] has over xx years of experience in adventure entertainment, having led adventure tours all across the US prior to starting his own escape room facility. His in-depth knowledge and expertise will help [Company name] favorably compete with other entertainment options in the area.
Success Factors
[Company Name] is qualified to succeed due to the following reasons:
- Escape rooms are exploding in popularity, and many young professionals and tourists want to experience these real-life adventures. In addition, the company surveyed local business owners and received highly positive feedback pointing towards a demand for adventure experiences as team building activities, and an excitement about using these services after the escape room launches.
- The Company’s location is in a high-volume retail area and will thus be highly convenient for a significant number of consumers.
- The management team has a track record of success in the entertainment sector.
- The escape room business is a proven business model and has succeeded in communities throughout the nation.
Financial Highlights
[Company Name] is currently seeking $150,000 to launch its escape room. Specifically, these funds will be used as follows:
- Escape room design/build: $25,000
- Working capital: $125,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Company Name] located at [insert location here] is a new escape room focusing on providing a range of puzzle and adventure-based games. The Company will offer an entertaining problem-solving experience to its clients in a relaxed, friendly, and safe environment.
The Company’s primary service includes providing a range of puzzles, riddles, adventure games, mystery rooms, and challenges, all in one place. It will showcase well-designed rooms, as well as a concession stand. The Company will strive to continuously upgrade its puzzles and mysteries so that visitors may have new experiences with each visit.
The escape room will be open from 9:00 am to midnight during weekends (Fridays to Sundays) and from noon until 9:00 pm every Monday through Thursday in order to accommodate the maximum number of players.
[Company Name]’s History
[Founder’s Name] is an entrepreneur with a passion for adventure, who seeks to provide an enjoyable and exciting experience to the customers by offering a variety of puzzles and mystery games for everyone in one place. [Company Name] will strive to become known as the most exciting escape room experience in [Location].
Upon surveying the local customer base and finding the potential location, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].
[Founder’s Name] has selected several possible locations and is currently undergoing due diligence on each property and the local market to assess the most desirable location for the escape room.
Since incorporation, the company has achieved the following milestones:
- Found multiple options for locating the business
- Developed the company’s name, logo, and website
- Contracted an escape room designer
- Determined equipment and inventory requirements
- Began recruiting key employees with experience in entertainment
[Company Name]’s Products/Services
The Company will provide the following services to its customers:
- Puzzle games
- Role-playing games
- Military operations missions
- Questing
- Scavenger and Treasure Hunts
- Augmented Reality and Virtual Reality Gaming
III. Industry Analysis
[Company Name] competes against small and individually owned escape rooms. According to market research, the Global Escape Room Market has been growing at a fast pace with explosive growth rates over the last few years, and it is estimated that the market will continue to grow significantly over the next five years.
Furthermore, a rise in disposable income has resulted in an upswing in demand for adventure experiences, such as Escape Rooms. Given the industry’s growing popularity, innovation is expected to enhance product development through things like VR integration, and mobile escape rooms.
The market size has increased at an explosive rate of 103.0% per year over the last five years, and as a result, the Escape Rooms industry in the US is projected to be worth $504 million.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve the residents living within a 20-mile radius of [company location]. The area it will serve is populated mostly by moderate to affluent people; as a result, they have the means to pay for adventure entertainment.
The precise demographics of the town in which the location resides is as follows:
| Fort Lauderdale, FL | |
|---|---|
| Total Population | 9,818,605 |
| 15 to 19 years | 753,630 |
| 20 to 24 years | 752,788 |
| 25 to 29 years | 759,602 |
| 30 to 34 years | 716,129 |
| Total Households: | 3,218,511 |
| Household income $50,000 to $74,999 | 550,971 |
| Household income $75,000 to $99,999 | 382,770 |
| Household income $100,000 to $149,999 | 440,285 |
| Household income $150,000 to $199,999 | 187,449 |
| Household income $200,000 or more | 208,954 |
Customer Segmentation
The Company will primarily target the following customer segments:
- Young Adults: Young adults make up the largest target market segment as these people are passionate about adventure and experiential games and have the time and energy to play them.
- Students: The town has a large population of high school and college students who seek a place where they can have some fun activities with their family and friends. Also, there are multiple high schools and colleges located in the surrounding area.
- Tourists: The Company will also reach out to people who are visiting the area, and want to experience something new and different.
V. Competitive Analysis
Direct & Indirect Competitors
Great Escape
Great Escape offers challenging, interactive escape rooms and immersive theater experiences, including large and immersive show designs, in-character performers, unique puzzles and audience interactions, and exciting storylines, that make for one-of-a-kind experiences.
Great Escape’s spacious lobby is great for company or group team building, events and parties. From helping a tour guide on a daring shipwreck scavenge of the historic sunken pirate ship the Whydah, helping a lead FBI agent crack the case on organized crime in the early 90s in Boston, to exploring a long-forgotten Apothecary that was operational in the Old Corner Bookstore in the early 1700s, Great Escape’s show themes are based on real events and happenings.
Merlin’s Quests
Merlin’s Quests is the first escape room to be established in [location], the first to offer remote virtual escape rooms and now provides experiences all over the world. Merlin’s Quests offers fun, affordable escape experiences for people of all ages. Merlin’s Quests also partners with other companies and installs and operates experiences in their locations. As the ‘Escape Game’ industry grows, Merlin’s Quests aspires to maintain the most intricate and fun rooms. Through help from its participants and partners, Merlin’s Quests constantly upgrades and expands its services.
Puzzle Hunters
Puzzle Hunters offers the most immersive escape rooms [location] has ever experienced. Whether people are looking for the best value, the most advanced tech, or the longest escape room anywhere in [location], they’ll find it right here! Whether it’s for team-building, holiday celebrations, or any sort of large group, Puzzle Hunters offers unique fun and the best value for group escape room experiences in [location].
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Management: The Company’s management team has xx years of adventure entertainment and marketing experience that allows them to market and serve customers in an improved and more sophisticated manner than the competitors.
- Relationships: Having lived in the community for xx years, [Founder’s Name] knows all the local leaders, newspapers, and other influencers. As such, it will be relatively easy for [Company Name] to build brand awareness and an initial customer base.
- Great service at an affordable price: The complete array of escape room services offered by [Company Name] rivals the most premium positioned competitor, [Competitor Name]. However, [Company Name] will offer these services at a much more affordable price.
- Location: [Company Name]’s location will be near the center of town, giving the company access to people going to and leaving the colleges, clubs, and passersby shopping in the city.
VI. Marketing Plan
The [Company Name] Brand
[Company name] seeks to position itself as an exciting competitor in the escape room industry.
The [Company Name] brand will focus on the company’s unique value proposition:
- Offering a wide collection of games, mysteries, and puzzles
- Convenient location
- Customer-focused environment
- Moderate price point
Promotions Strategy
[Company Name] expects its target market to be residents living within a 20-mile radius of the location. The Company’s promotions strategy to reach the audience includes:
Pre-Opening Events
Before opening the escape room, [Company Name] will organize pre-opening events and treasure hunts designed for prospective customers, local merchants, and press contacts. These events will create buzz, and awareness for [Company Name] in the area.
Advertisement
Advertisements in print publications like newspapers, magazines, etc., are an excellent way for businesses to connect with their audience. The Company will advertise its products in popular magazines and news dailies. Obtaining relevant placements in industry magazines and journals will also help in increasing brand visibility.
Public Relations
[Company Name] will hire an experienced PR agency/professional(s) to formulate a compelling PR campaign to boost its brand visibility among the target audience. It will look to garner stories about the company and its offerings in various media outlets like newspapers, podcasts, television stations, radio shows, etc.
Social Media Marketing
Social media is one of the most cost-effective and practical marketing methods for improving brand visibility. The Company will use social media to develop engaging content in terms of escape room and treasure hunt themes and customer reviews that will increase audience awareness and loyalty. Engaging with prospective clients and business partners on social media platforms like Facebook, Instagram, Twitter, and LinkedIn will also help understand changing customer needs.
Word of Mouth Marketing
[Company name] will encourage word-of-mouth marketing from loyal and satisfied clients. The Company will use recommendations and word-of-mouth marketing to grow the customer base through the network of its existing customers. The Company will be incentivizing its existing customer base to encourage their friends to come and try their service for the first time.
Special Offers
Offers and incentives are an excellent approach to assisting businesses in replenishing the churn in their customer base that they lose each year. The Company will introduce special offers to attract new consumers and encourage repeat purchases, which will be quite advantageous in the long run.
Pricing Strategy
Pricing strategy is one of the most important functions that any business can plan for attracting customers. Prices are a foundational element of a company’s revenues—if managed carefully, they can generate high profits.
[Company Name]’s pricing will be moderate, so customers feel they receive great value when visiting the escape room.
VII. Operations Plan
Functional Roles
[Company name] will carry out its day-to-day operations primarily on a booking basis, either online or via call on the company’s guest experience number available on the website. Walk-in clients will be served by the earliest available slot, but priority will be given to clients who booked a game in advance.
To execute on [Company Name]’s business model, the company needs to perform several functions, including the following:
Service & Administrative Functions
- Escape room instruction and monitoring
- Cashier
- Manager
- General & administrative functions including legal, marketing, etc.
- Hiring and training staff
- Maintenance personnel
Milestones
[Company Name] expects to achieve the following milestones in the following [] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is a family-owned escape facility that is owned by [Founder’s name] and his immediate family members. The business will be managed by [Founder’s name] and his son [insert name]. [Founder] has over xx years of experience in adventure entertainment, having led adventure tours all across the US prior to starting his own escape room facility. His in-depth knowledge and expertise will help [Company name] favorably compete with other entertainment options in the area.
[Founder] graduated from the University of ABC where he majored in Theater.
Hiring Plan
[Founder] will serve as the CEO. In order to launch the escape room, the company will need to hire the following personnel:
- Manager
- Accountant / Cashier
- Marketing and Sales Officer
- Escape Room Guide / Instructor
- Customer Care Executive/ Front Desk Officer
- Janitorial Staff
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come from the gaming services rendered to its customers. The major costs for the company will be staff salaries. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.
Capital Requirements and Use of Funds
[Company Name] is currently seeking $150,000 to launch its escape room. Specifically, these funds will be used as follows:
- Escape room design/build: $25,000
- Working capital: $125,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of customers per day | Per location |
|---|---|
| FY 1 | 100 |
| FY 2 | 120 |
| FY 3 | 140 |
| FY 4 | 165 |
| FY 5 | 190 |
| Annual Lease (per location) | $60,000 |
| Yearly Lease Increase % | 2.50% |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
