How to Start a Video Arcade Business
A video arcade or family entertainment center can be a fun and lucrative business opportunity. If you have a passion for games, starting a video arcade may be your calling. Arcades are relatively low-maintenance businesses with low customer interaction; rather than sell a product, you provide a service: hours and hours of fun for your customers.
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Instructions
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Obtain a line of credit or another financing option to pay for your start-up costs. The average cost of a new arcade machine can range between $3,000 and $5,000, depending on the popularity of the title.
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Find a suitable location for purchase or lease. The most successful arcades will usually be in locations near colleges or schools. Many of your clients will be children and teenagers; making the location convenient and easy for them to access is important. Make sure the location is zoned for commercial purposes. Make sure the location's size will suit your business plans. Smaller locations are OK if you plan on having a limited number of games at first; you can always move to a larger location once you expand.
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Visit your local tax authority to apply for any licenses needed. At a minimum, you will need a general business license and a tax identification number for business purchases that are exempt from sales tax. Most wholesale vendors will also require a tax identification number to set up your account. Depending on your location, additional licenses or certificates may be required.
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Set up your property to get ready for business. Before ordering your arcade games, get the rest of your store in order. Have a sign made for the exterior of the business and decorate the interior with posters or art related to video games. Decide whether you want to sell food, drinks or other items. If so, you need to purchase related supplies, such as a refrigerator or microwave oven. Offering refreshments and food can add to your bottom line but may also require that you hire at least one employee.
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Order your arcade games. Try to keep a good mix of older games and newer games. Some classics, such as Pac-Man or Galaga, may be lower-priced than newer games but just as popular. Prize games, such as crane machines, tend to be popular and have high profits (it's so hard to pick that bear up with the claw).
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Advertise your business and have your grand opening. Let the games begin!
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Tips & Warnings
The most successful arcades keep their game selection updated regularly. When a hot, new arcade game comes to market, you need to stock it quickly. Never adding new games can bore your customers and cause them to lose interest in visiting your arcade. Consider purchasing used arcade games if you have limited capital. While the selection may be limited, used arcade games usually sell for between $1,000 and $2,000.
Smaller arcades can easily be managed by one person. An arcade with many games and other products will probably require multiple employees.
References
Resources
- Photo Credit ilovemypit: flikr.com
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Comments
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What about the conversion of licensing and such for use of xboxes and other consoles or computers and even to an extent custom console/boxes for atari games or others that are not on the market?
