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.
Download the Arcade business plan template (including a customizable financial model) to your computer here <–
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?
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.
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
- VR games
- Multiplayer sports and racing games
- First person shooters
- Air hockey
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.
Download the Arcade business plan template (including a customizable financial model) to your computer here <–
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.
The precise demographics for Seattle, Washington are:
| Total | Percent | |
|---|---|---|
| Total population | 1,680,988 | 100% |
| Male | 838,675 | 49.9% |
| Female | 842,313 | 50.1% |
| 20 to 24 years | 114,872 | 6.8% |
| 25 to 34 years | 273,588 | 16.3% |
| 35 to 44 years | 235,946 | 14.0% |
| 45 to 54 years | 210,256 | 12.5% |
| 55 to 59 years | 105,057 | 6.2% |
| 60 to 64 years | 87,484 | 5.2% |
| 65 to 74 years | 116,878 | 7.0% |
| 75 to 84 years | 52,524 | 3.1% |
Customer Segmentation
Hal’s Arcade will primarily target the following customer profiles:
- Families
- 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.
Download the Arcade business plan template (including a customizable financial model) to your computer here <–
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:
Location
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.
Pricing
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.
Download the Arcade business plan template (including a customizable financial model) to your computer here <–
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
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.
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
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
Download the Arcade business plan template (including a customizable financial model) to your computer here <–
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
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Total Revenues | $360,000 | $793,728 | $875,006 | $964,606 | $1,063,382 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $64,800 | $142,871 | $157,501 | $173,629 | $191,409 | |
| Lease | $50,000 | $51,250 | $52,531 | $53,845 | $55,191 | |
| Marketing | $10,000 | $8,000 | $8,000 | $8,000 | $8,000 | |
| Salaries | $157,015 | $214,030 | $235,968 | $247,766 | $260,155 | |
| Initial expenditure | $10,000 | $0 | $0 | $0 | $0 | |
| Total Expenses & Costs | $291,815 | $416,151 | $454,000 | $483,240 | $514,754 | |
| EBITDA | $68,185 | $377,577 | $421,005 | $481,366 | $548,628 | |
| Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
| EBIT | $41,025 | $350,417 | $393,845 | $454,206 | $521,468 | |
| Interest | $23,462 | $20,529 | $17,596 | $14,664 | $11,731 | |
| PRETAX INCOME | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
| Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Use of Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Taxable Income | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
| Income Tax Expense | $6,147 | $115,461 | $131,687 | $153,840 | $178,408 | |
| NET INCOME | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 |
Balance Sheet
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $30,000 | $33,072 | $36,459 | $40,192 | $44,308 | |
| Total Current Assets | $184,257 | $381,832 | $609,654 | $878,742 | $1,193,594 | |
| Fixed assets | $180,950 | $180,950 | $180,950 | $180,950 | $180,950 | |
| Depreciation | $27,160 | $54,320 | $81,480 | $108,640 | $135,800 | |
| Net fixed assets | $153,790 | $126,630 | $99,470 | $72,310 | $45,150 | |
| TOTAL ASSETS | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $315,831 | $270,713 | $225,594 | $180,475 | $135,356 | |
| Accounts payable | $10,800 | $11,906 | $13,125 | $14,469 | $15,951 | |
| Total Liability | $326,631 | $282,618 | $238,719 | $194,944 | $151,307 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
| Total Equity | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
| TOTAL LIABILITIES & EQUITY | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 |
Cash Flow Statement
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | ||||||
| Net Income (Loss) | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 | |
| Change in working capital | ($19,200) | ($1,966) | ($2,167) | ($2,389) | ($2,634) | |
| Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
| Net Cash Flow from Operations | $19,376 | $239,621 | $269,554 | $310,473 | $355,855 | |
| CASH FLOW FROM INVESTMENTS | ||||||
| Investment | ($180,950) | $0 | $0 | $0 | $0 | |
| Net Cash Flow from Investments | ($180,950) | $0 | $0 | $0 | $0 | |
| CASH FLOW FROM FINANCING | ||||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 | |
| Cash from debt | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
| Net Cash Flow from Financing | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
| Net Cash Flow | $154,257 | $194,502 | $224,436 | $265,355 | $310,736 | |
| Cash at Beginning of Period | $0 | $154,257 | $348,760 | $573,195 | $838,550 | |
| Cash at End of Period | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 |
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: