Arcade Business Plan Template

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 arcade business plan template (including a full, customizable financial model) to your computer here.

 

Sample Arcade Business Plan Template

Below is an arcade business plan example with each of the key sections to help you write an arcade business plan for your own company.

I. Executive Summary

Business Overview

[Company Name] is a new arcade located in downtown [location]. We offer a variety of games and activities to enjoy, including vintage arcade games, skill-based games, and modern gaming experiences. Customers can also enjoy our food and drink offerings as they play as well as purchase select merchandise. The arcade is open seven days a week from 11:00 a.m. to 10:00 p.m. allowing both families and adults the opportunity to frequent our establishment.

Products Served

[Company Name] will provide numerous games to entertain our customers. The games will range from old-school classics to the hottest new releases. Some example games include:

• Pac-Man
• Paperboy
• Street Fighter
• Mario Bros.
• Mario Kart
• Dance Dance Revolution
• Pinball

We will also offer a wide selection of food and drinks for customers to enjoy while they play around the arcade. Customers can also purchase merchandise with our logo and business name to show others their love for our arcade.

Customer Focus

[Company Name] will serve the residents of [location] and the surrounding areas. The demographics of these customers are as follows:

• 120,492 residents
• Average income of $55,000
• 42% married
• 36% with children under 18
• Median age: 35 years

Management Team

[Company Name] is led and run by [Founder’s Name], who has worked in the industry for [X] years. [Founder’s Name] has managed some of the most popular arcades and similar establishments throughout the region. During this time, he has gained an in-depth knowledge of all aspects of an arcade business, including the operations (e.g., running day-to-day operations) and management (e.g., staffing, marketing, etc.) sides of the industry.

Success Factors

[Company Name] is uniquely qualified to succeed due to the following reasons:

• There are very few arcades in the community, despite there being a huge population that would be interested in such an establishment. In addition, we have surveyed the local population and received extremely positive feedback saying that they explicitly want to frequent our business when it launches.
• Our location is in a high-volume traffic area and will thus be highly convenient to a significant number of passersby.
• The management team has a track record of success in the arcade business.
• The arcade business has proven to be a successful business in the United States.

Financial Highlights

[Company Name] is currently seeking $550,000 to launch. Specifically, these funds will be used as follows:

• Store design/build: $250,000
• Equipment and machinery: $150,000
• Working capital: $150,000 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] is a new arcade located in downtown [location]. We offer a variety of games and activities to enjoy, including vintage arcade games, skill-based games, and modern gaming experiences. Customers can enjoy our food and drink offerings as they play and can purchase select merchandise and gear. The arcade is open seven days a week from 11:00 a.m. to 10:00 p.m. allowing both families and adults the opportunity to frequent our establishment.

[Company Name] is led and run by [Founder’s Name], who has worked in the industry for [X] years. [Founder’s Name] has managed some of the most popular arcades and similar establishments throughout the region during his career. His time managing similar businesses has helped him understand what makes arcades successful as well as what keeps customers coming back. He also gained an in-depth knowledge of all aspects of an arcade business, including the operations (e.g., running day-to-day operations) and management (e.g., staffing, marketing, etc.) sides of the industry. His goal is to utilize this knowledge and skills to build the most popular arcade in [location].

[Company Name]’s History

[Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation] and found a potential retail location soon after. The business is currently being run from [Founder’s Name]’s home, but once the lease on [Company Name]’s retail location is finalized, all operations will be run from there.

Since incorporation, the company has achieved the following milestones:

• Found a retail location and signed a Letter of Intent to lease it
• Developed the company’s name, logo, and website located at [website]
• Created the initial food and drink menu
• Determined the initial selection of games and found arcade machine suppliers
• Determined equipment and inventory requirements
• Began recruiting key employees with experience in the butcher industry

[Company Name]’s Products/Services

[Company Name] will provide numerous games to entertain our patrons. The games will range from old-school classics to the hottest new releases. Some example games include:

• Pac-Man
• Paperboy
• Street Fighter
• Mario Bros.
• Mario Kart
• Dance Dance Revolution
• Pinball

We will also offer a wide selection of food and drinks for patrons to enjoy while they play around the arcade. Customers can also purchase merchandise with our logo and business name to show others their love for our arcade.

 

III. Industry Analysis

Arcades have been a popular form of entertainment for decades. Since their inception in the 1930s, arcades have been a go-to for nightly fun all around the world. Though some think of them as a thing of the past, arcades have modernized in order to continue entertaining game lovers of all ages.

According to TechNavio, the industry is expected to continue to grow for the next few years at a rate of 2%. Families are constantly looking for fun-filled evenings and exciting places that get them out of the house. Therefore, arcades will continue to be an essential business as they are one of the few businesses that can provide fun for the whole family.

 

IV. Customer Analysis

Demographic Profile of Target Market

[Company Name] will serve the community residents of [location] and its surrounding areas. Any child or adult that loves arcade games is welcome to our arcade.

Customer Segmentation

Though we accepted everyone who has a love for arcade games, we will specifically target the following three customer segments:

• Families: Arcades are a timeless location for families to frequent and enjoy themselves after a long week of school and work. Therefore, we will market the numerous family-friendly games and activities we have that parents and kids can enjoy together.
• Adult Arcade Fans: Arcades aren’t just for kids. People of all ages can enjoy the activities that our arcade has to offer. Therefore, we will market to adults as well and keep our arcade open late to accommodate their busy work schedules.
• Groups And Parties: Arcades are the perfect setting for large groups, parties, and other get-togethers. Therefore, we will make sure to showcase our large building, private rooms for parties, and the variety of activities we offer to large groups.

 

V. Competitive Analysis

Direct & Indirect Competitors

The following establishments are located within a ten-mile radius of [Company Name], thus providing either direct or indirect competition for customers:

Dave & Buster’s
Dave & Buster’s has been the go-to family arcade experience for decades. Providing numerous modern and vintage arcade experiences, game lovers of all ages will find something to enjoy during their visit. Dave & Buster’s also provides a wide selection of food items to enjoy while gaming throughout the facility.

Though Dave & Buster’s has seen success over the past few decades, many complain that it can be quite a costly experience, especially for large families. Food and drink options are overcharged, and the prizes require too many tickets. A family can easily spend hundreds of dollars in a single night. Families who frequent [Company Name] will find all the prices to be much more reasonable.

Arcade Extravaganza
Arcade Extravaganza is a local arcade that caters to lovers of the vintage era of classic arcade games. Here you will find all the games you grew up with, including Pac-Man, Mario Bros., and Pinball. It’s a great establishment for anyone wanting to feel nostalgic and take a break from the craziness of modern life.

Arcade Extravaganza exclusively provides only classic arcade games. Therefore, anyone looking for modern games and activities will not find what they are looking for while patronizing Arcade Extravaganza. Anyone interested in more modern games and activities will prefer to frequent [Company Name].

Chuck E Cheese
Chuck E Cheese has been a staple for kids and family entertainment for decades. Providing numerous games and activities, Chuck E Cheese is a great place to take your kids for a party, event, or night out. Though not specifically an arcade, this business offers numerous arcade games as well as other activities you would find in similar establishments.

Chuck E Cheese’s has lost much of the good reputation it built up decades ago. From low-quality food and prizes to unpleasant staff, the business is no longer the go-to place for families. As such, much of their previous target demographic will be looking for a similar establishment that can provide a much better experience.

Competitive Advantage

[Company Name] enjoys several advantages over its competitors. These advantages include the following:

• Management: Our management team has years of experience in the arcade business that will prove invaluable.
• Location: [Company Name]’s location is located in a safe area that is easily accessible by car, foot, or public transportation.
• Affordability: [Company Name] will aim to price its games, food, and merchandise moderately so that no one has to break the bank to have a fun night.

 

VI. Marketing Plan

You can download our arcade business plan template (including a full, customizable financial model) to your computer here.

The [Company Name] Brand

The [Company Name] brand will focus on the company’s unique value proposition:

• Offers the best food and drinks at an affordable price
• Offers a premier arcade experience
• Provides an environment suitable for both individuals and families
• Provides excellent customer service

Promotions Strategy

[Company Name] expects its target market to be residents living within a ten-mile radius of its location. [Company Name]’s promotion strategy to reach these potential customers includes:

Website/SEO
[Company Name] will develop a professional website that showcases pictures of the arcade as well as a menu of our food/drink offerings. It will also invest in SEO so that the company’s website will appear at the top of search engine results.

Social Media
[Founder’s Name] will create the company’s social media accounts and invest in ads on all social media platforms. These accounts will showcase pictures and videos of the arcade and available games. The company will use targeted marketing to appeal to our target demographics.

Direct Mail
[Company Name] will blanket neighborhoods surrounding its locations with direct mail pieces. These pieces will provide general information on [Company Name], offer discounts and/or provide other enticements for people to frequent the arcade.

Public Relations
We will contact all local newspapers and television stations and send them a press release describing the opening and unique value proposition of [Company Name].

Merchandise
We will sell attractive merchandise with our logo and business name. When people see their friends and family with this merchandise, they will instantly recognize how fun and exciting our establishment is.

Pre-Opening Events
Before opening the arcade, [Company Name] will organize pre-opening events designed for prospective customers, local merchants, and press contacts. These events will create buzz and awareness for [Company Name] in the area.

Billboard
[Company Name] will highlight games and food we expect to be popular on a major billboard facing the busiest highway in town. The billboard will provide the location of [Company Name] and the website URL.

Pricing Strategy

[Company Name] will aim to price its food, drinks, and games at a moderate price that is competitive with other local and national arcades. Our goal is to develop a reputation as an affordable arcade that everyone can frequent to unwind and have a good time.

 

VII. Operations Plan

Functional Roles

In order to execute [Company Name]’s business model, the company needs to perform many functions, including the following:

Administrative Functions

• Bookkeeping
• Marketing
• General & administrative functions
• Hiring and training staff

Kitchen Functions

• Wait on customers and take orders
• Prepare food and drinks
• Process food bills and payment
• Provide excellent customer service

Arcade Functions

• Provide excellent customer service
• Maintain arcade machines
• General cleaning and maintenance functions

Milestones

The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] 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 led and run by [Founder’s Name], who has worked in the industry for [X] years. [Founder’s Name] has managed some of the most popular arcades and similar establishments throughout the region. During this time, he has gained an in-depth knowledge of all aspects of an arcade business, including the operations (e.g., running day-to-day operations) and management (e.g., staffing, marketing, etc.) sides of the industry.

Hiring Plan

[Founder] will serve as the arcade manager. In order to launch our arcade, we need to hire the following personnel:

• Wait Staff (6 to start)
• Bartenders (2 to start)
• Cooks (2 to start)
• Assistant Managers (2 to start)

 

IX. Financial Plan

Revenue and Cost Drivers

[Company Name]’s revenues will primarily come from the sales of food and drink and the fee to play each arcade game.

The major costs for the company will be food and drink costs, staff salaries, and lease. In the initial years, the company’s marketing spend must also be taken into consideration as it establishes itself in the market.

Capital Requirements and Use of Funds

[Company Name] is currently seeking $550,000 to launch. The capital will be used for funding capital expenditures, building and design, purchasing equipment and arcade games, labor, marketing expenses, and working capital.

Specifically, these funds will be used as follows:

• Store design/build: $250,000
• Equipment and machinery: $150,000
• Working capital: $150,000 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
Year 1	50
Year 2	75
Year 3	125
Year 4	175
Year 5	250
Annual Rent	$90,000

 
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