It takes patience to start a new business (update on my arcade)

Shaggy February 21, 2008 15

Well here is another update on the very slow progress for my arcade. For any of you following my progress, it has been slow going – I submitted a request to the owners of the store I am looking to get into (it’s one store of many in a strip mall owned by Kmart/Sears) way back in November and we still haven’t hammered everything out. A lot of the blame I have to put on the realtor that Kmart/Sears is using as he has not been very helpful. My own realtor will fax in requested information, call up to ensure that it was received and no one answers the phone but he leaves a message. He keeps trying and it takes three weeks or longer for Kmart’s realtor to finally get back to us. Then he just happened to loose the fax and we have to do it again. So with the realtor being difficult to contact for some reason (in fact my realtor says that he sounds annoyed when he talks with him – like we’re doing him a favor by trying to do business with them), it makes a process that should otherwise be simple take much longer than required. I have sought to discuss things with the owners but have not had much luck there either. This has left me quite frustrated and I have been looking for a different store but unfortunately nothing else has come along that fits the price and is a better location than this one. Also they need to have the store re-keyed because the keys have been lost to the particular store I am wanting to get into – so overall it has been a very trying experience for my patience but I am hopeful that we will finally get it taken care of soon as we were able to get some information from Sears today that clears things up.


15 Comments »

  1. Nomax February 21, 2008 at 12:35 pm - Reply

    Keep faith! I really hope you’ll succeed to open (and stay open) your arcade! I’ve been working in several arcades for the 5 last years… Some had old machines but with lots of visitors while others (like the one where I’m working) have newer titles (2x OutRun 2SP dx, 2x Superbikes, HOTD 4, VT 3, VS 4, TC 3, latest Stern pins) but lack of visitors. Three very important points that can change everything: don’t neglect advertising (people need to know your location exist), an attracting atmosphere (light and music) and events (contests, tourneys). An arcade success (o not) reflects its management’s attitude. Some location’s owners (even while being in the business for years) still don’t have a clue about what players want, and their arcade don’t have the success they desserve. That what’s different here and that’s why I’m confident about your project. Good luck!

  2. Josh February 23, 2008 at 1:03 am - Reply

    I’d find it interesting to know what kind of start up costs you are facing. How large of a population your area is. Are you going heavy on redemption ganes? etc.

  3. Shaggy February 23, 2008 at 5:27 pm - Reply

    Thanks for the comments guys.

    As for start-up costs, I probably could factor in which games I have bought already and for the 11 games I have, that equals $3765. They are all old machines however but I do not mind that as it gives me a small collection of classics and those still hold some popularity with older gamers.

    I have a $10k line of credit for business expenses and I have a $32,500 eqiupment loan that I can get – once I get a business license. The catch is that I can’t get a business license until I get a location that is inspected by the city. Fortunately the first month of rent is free so I’ll have time to fix it up, paint, probably re-carpet, get the inspections done and then get the loan (the loan has already been approved by the SBA; I did want a lot more than that but thanks to my “short” credit history and the amount of equity in my house, that’s all they would give me. If I could find an investor that would be best but it’s really hard to find someone that wants to invest in an arcade. Most I’ve found want to do other things or don’t want to invest in a start-up). Sears will give me $1000 for the store to do what I want however, I may use that for the sign. For population, the immediate vicinity (1 mile) has about 30,000 residents I believe and is growing. I am not focusing on ticket redemption at all – I will try and have a couple of self-redepmtion games like Stacker but I am focusing on an older audience than most arcades.

  4. John February 26, 2008 at 1:44 am - Reply

    I am interested. Are you connected to a Sears or a Kmart Shopping center? Does the shopping center have good traffic? Is the traffic in the age group you are looking to attract? As far as you can get out of your realator, or SHC’s is this location staying open as a Kmart or Sears? What city are you near? If you have my email from where I was required to enter it, feel free to email me back to correspond if you like.

  5. Ramon May 1, 2008 at 7:02 am - Reply

    Hello guys boy am I glad to have found this type of posting on line. See I to am thinking about starting an arcade business in my town but need help in the start up process, I have a potential investor that has given me a green thunbs up on the idea and he is willing to invest as much as $100,000 dollars into the idea m the problem Im being faced with is that I need to get him a business plan, showing that I have done my homework on the industry, and I dont know where to start as I never had to write up a business plan before, can anyone help me and let me know of any ideas that would be great, thank you> Sincerely a father of 4 small children who just wants a break in life> Ramon

  6. Ramon May 1, 2008 at 7:03 am - Reply

    Please email me with any help that anyone can offer me thank you here is my email address r_m_d1@yahoo.com please write in the subject line arcade so that I may distinguish it from the rest of the emails

  7. Shaggy May 1, 2008 at 2:36 pm - Reply

    Ramon,

    Check out this post:

    http://arcadeheroes.com/2008/04/06/starting-an-arcade-part-1/

    I go through some of the initial aspects of an arcade, including the business plan part. I do need to think up a part 2 to go along with it though.

    When I really started pushing to do this I didn’t have a business plan either and I wasn’t really sure how to go about it. I had made a mock business plan in high school but it was for something completely different. Fortunately I found out out about SCORE – they are a group of small business people that came together and created free resources that people in our situation can use. On SCORE.org I found a business plan template that was incredible – by just following it I created what I need, all by myself. Of course to do an arcade you’ll need resources to pull your stats from – I’d suggest checking a local library for statistics on your local economy/population – they should have census type materials available there. Your state may also have a business website portal with extra details. I also would suggest that you call up the city where you plan to open up in first, find out if they have any sort of restrictions placed upon arcade amusement. It’s better to know that ahead of time and the people you can call will either be in a Planning and Zoning Dept. or something close to that (sorry, this is if you live in the US – I do not know how it works outside of the US). Feel free to use info you find on AH to support statements you make in the business plan. I also suggest going to Play Meter Magazine’s website and finding their annual State of the Industry report – yearly stats for the industry. This is VERY useful for an arcade startup.

    I also mention in the article that it is a good idea to find other arcade or FEC operators and talk with them about the business. If you can’t talk to the owner themselves, talk to one of their managers. If they are friendly they will let you know how much an arcade makes a week in that area, what games do best, etc. I did this and they were pretty open with me but results might vary. I know when I worked at an arcade we once had a guy come in and ask the head manager about it as he was going to open one up.

    I hope that helps, I’ll try and expound on the subject more soon.

  8. Arcade Question July 16, 2008 at 8:42 pm - Reply

    Where do you look to find the machines that you are going to place in your arcade? I know in the beginning, you need to have several games to keep the kids’ attention, but that in the beginning it is hard to have too many. This is the problem that I run into and question. But maybe there is a way to get bulk discounts?

  9. ERICA November 13, 2008 at 4:28 am - Reply

    HI I HAVE BEEN WORKING ON A BUSINESS PLAN TO OPEN MY OWN ARCADE IN MY TOWN FOR 7 MONTHS I DONT OWN A HOME AND MY CREDIT IS NOT THAT GREAT I CLEAN HOUSES FOR A LIVING AND IN MY AREA THERE IS NOYHING FOR FAMILIES TO DO I KNOW THIS BUSINESS WOULD BE PROFITABLE TO ME AND ALSO BRING JOY TO LOTS OF BOARD CHILDREN IN THIS TOWN BUT HOW DO I GET THE FUNDING I DONT EVEN HAVE A SAVINGS IN OTHER WORDS I HAVE NO MONEY TO INVEST HOW DO I GET IN TOUCH WITH INVESTORS WHAT CAN I DO TO MAKE THIS HAPPEN I AM READY TO GIVE UP AND CONTINUE TO ADVERTISE FOR CLEANING HOUSES I NEED SOME TYPE OF LEADING ADVICE PLEASE EMAIL ME WITH INFORMATION YOU MIGHT HAVE THAT CAN HELP ME AT tckerica@gmail.com PLEASE ADRESS THIS TO PARADISE ARCADE THANK YOU GOOD LUCK TO ALL.

  10. sh1pwr3k November 14, 2008 at 12:40 am - Reply

    Erica sounds like these guys already gave a bit of advice, i can sympathize a bit since im in the same situation. And yes you are right money is a major issue always is when upstarting a business. I have been doing a bit of research and i might be able to give you a bit of insight.

  11. Shaggy November 14, 2008 at 2:49 pm - Reply

    Erica,

    Come up with a killer business plan and save as much money as you possibly can. If you could buy a couple of working games that would also help – investors like to see that someone has planned everything out and that they are determined enough about it that they have already risked a little. It is possible for you to find an investor without doing those things, if you can do a lot of talking but it is an uphill battle (don’t let that discourage you of course). Doing those things I mentioned though give you leverage. I would also consider looking to your family to help. I didn’t expect it to happen but family members have invested a bit of money into my arcade and it has helped me tremendously. My parents bought two vending machines that are on the premises; my aunt and uncle bought two pinball machines which we share the revenue on. You can consider things like that to help.

  12. Izzy December 3, 2008 at 8:38 pm - Reply

    Shaggy, I’m really interested in seeing the progress of your arcade from beginning to present. I don’t know if you have a blog or a website where you continously posted this information, but if you did, I would be very interested in checking it out. (I would be interested in asking you a few questions, feel free to email me at Spikizzy@yahoo.com)

    A large shoe store closed down in my area, I believe the sign said 8000 square feet. I believe the location is pretty much ideal for an arcade. It is directly across the street from an elementary school, 1 block from the train station and the local movie theater, 2 blocks from a middle school and about 4 blocks from a high school. There are a bunch of restaurants and barber shops and pizzarias in the area as well. Just the fact that it is in the immediate vicinity of the schools is a very strong benefit. I really want to open up a place for all the kids to hang out instead of seeing them drinking and smoking in front of the local dunkin donuts. I have alot of ideas of what types of entertainment I’d want to include in my arcade (by the way, they are alot more expensive than I thought, unless I’m looking at the wrong sites. $3,000 for a pinball machine??? good lord)

    Anyways, you should write an article on everything you went through to open up your arcade. I’ve looked for articles like that online and I know that there arent any. I’d be interested in reading about your experiences and I know alot of other people would as well. Please email me if you wouldn’t mind sharing some of your wisdom. I would really appreciate it.

  13. Alex January 21, 2009 at 5:27 pm - Reply

    I am intereted in opening up an Arcade in the Orlando, Fl area. All the research I have done has proved to be useless. Basically it is a risk that will fail, or be a huge hit.

    The location is one of the most important things to your success. Especially advertising. I have polled all my friends with about a 50/50 feel torwards Arcades.

    You also have to remember people have 1 to more consoles in thier homes these days, they are lazy, and we are in a recession. You have to find a way to bring them out.

    I hate to sound negative, on the contrary I still want to get into the business, but you have to be careful.

  14. Dave Gull March 6, 2009 at 4:05 pm - Reply

    I have read through all of the issues that people are facing in opening an arcade. I am the Director of Commercial Sales for Monkey’s Arcade’s and am willing to help in anyway possible. I have extensive contacts for financing and we are direct with almost every manufacture. I have helped many individuals realize their dream by adding in the hard work and preparation. Please feel free to call or email me anytime, I will be more than happy to assist or just answer some questions.
    Dave Gull
    1-877-386-2731

  15. Amanda Smith December 22, 2009 at 7:29 pm - Reply

    Hey I just recently got the idea of starting an arcade. I’m far from close to knowing what I’m doing, so can anyone help me? What kind of things do people like to see in arcades….besides games and food? I want this to be a kid-friendly place.

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