The Family Entertainment Center Business Plan and Dashboard styled financial model provides you with a real-time overview of how the financial tables adjust as you modify the inputs.
1.0 Executive Summary
The purpose of this business plan is to raise and examine the allocation of $2,000,000 for the development of a family friendly gaming center based in Toms River NJ. Family Entertainment Center (“the Company”) will establish its operations later this year. At this time the company is seeking $500,000 of investor financing as well as a $1.5 million mortgage for the development of this business. The Company will have a number of different revenue streams including admission fees concession sales and membership that would drive substantial profits in the coming years. The founder of the business is Tom Jones.
1.1 The Services
The first revenue center for the business will come from the ongoing admission fees to the large-scale facilities based in the heart of Toms River. Generally daily admission fees will range from $20 to $30. and it will allow patrons to access to all aspects of the facility (depending on whether it is a weekday or weekend).
The second revenue center will come from the ongoing sale of food and beverages to the general public. The business will have a segmented part of its facility that allows for the sale of both packaged items as well as prepared foods. This is an important part of operations as management expects that 20% of aggregate revenues will come from these sales.
The third revenue center from the business will come from onsite event hosting. Management expects that a number of children will have their birthday parties held at the facilities throughout the course of the year. This will not only drive substantial additional revenues but will also allow the business to increase its visibility as more people attend events at Family Entertainment Center.
The Company’s fourth revenue center will come from ongoing usage of arcade games and specialized equipment that requires additional fees. The location will have a number of exciting installations that will draw immense patronage in the coming months and years.
The third section of the business plan will further describe the operations of the Company.
1.2 Financing
As discussed above, the business is seeking $500,000 via a private investment as well as $1.5 million via a mortgage. The terms of this investment are to be determined during negotiation. In regards to the mortgage, this business plan assumes that the business will receive a 20 year loan carrying a 7% interest rate.
The next section of the business plan will document the use of funds. It should be noted that a substantial portion of this capital will be used for the acquisition of real estate.
Moving forward the company would be a strong candidate for expansion financing given the large asset base of the business as well as the substantial contribution margins generated from all sales. These risks will be further reduced as the business introduces a membership-based program that will create recurring streams of revenue on a monthly basis.
1.3 Mission Statement
The Family Entertainment Center is designed to provide the community with an exceptional family-friendly experience at an affordable price.
1.4 Management Team
Tom Jones is a highly experienced entrepreneur that has more than 20 years of experience developing family-friendly entertainment centers. He will be able to quickly bring the operations of this business to profitability while having it operate as a community-minded enterprise that is well known throughout the Toms River market.
1.5 Sales Forecasts
1.6 Expansion Plan
Over the next three years the company will make substantial reinvestment into the scale and scope of its marketing operations while concurrently introducing new equipment that will drive repeat patronage on an ongoing basis. After the third year of operation, the business may establish additional within other parts of southern New Jersey or Pennsylvania. The company will also continue to expand its membership operations as this produces recurring income which further contributes to the economic stability of the business.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Family Entertainment Center, LLC
2.2 Required Funds
Below is a breakdown of how the funds are to be used:
2.3 Investor Equity
This will be determined during negotiation. However, on a tentative basis management expects to sell a 40% equity interest in the business in exchange for the $500,000 of equity capital needed as a down payment and for working capital purposes.
2.4 Management Equity
This will be further determined during negotiation.
2.5 Exit Strategy
Historically, family friendly entertainment centers have priced her earnings multiples of 5 to 8 times the previous year’s earnings depending on whether or not the underlying real estate is included in the purchase. If it is financially prudent to do so, the company will hire a qualified business broker to work with the business to divest it to a third party. It should be noted that this event is not expected to occur for a substantial period of time as Mr. Jones intends to aggressively expand this business over the first three years with the potential development of new locations thereafter.
3.0 Operations
As discussed in the executive summary, Family Entertainment Center will be an immensely large facility that will provide a wide range of entertainment for people within southern New Jersey as well as selected markets of Pennsylvania and Delaware. In regards to the scale and scope of the business, it is expected that the business’ location will have approximately 12,000 square feet of usable space. This will allow for numerous installations to be offered to the general public including arcade games, trampolines, rock climbing walls, as well as other exciting installations that are common for these types of businesses.
In regards to event hosting, it is expected that most individuals will be between the ages of five to 15 years old and their parents are looking for an exciting experience for their children and their guests. Most importantly, this will allow Family Entertainment Center to generate substantial visibility which will further allow ongoing patronage within the target market. Each child that has an event at the location will be given a special present at the end of the event. Parents will be able to choose what type of cuisine will be served, which will range from sandwiches to pizza as well as a ride range of soft drinks. Each event is expected to generate $300 to $1,000 of revenue depending on the number of participants.
Of special importance to the company’s operations will be its membership program. This will allow for unlimited access to selected areas of the facility while providing substantial discounts on food and beverage service as well As for usage of arcade game systems. Membership pricing will be approximately $20 to $30 per month per enrolled individual. This will create substantial streams of recurring revenue that will further contribute to the ongoing economic stability of the business while concurrently boosting its valuation. These operations will commence as soon as the business launches its operations later this year.
In regards to food and beverage service, the business will have approximately 20% of its usual space allocated for these purposes. The business will serve a wide range of classic American fare including sandwiches, burgers, chicken dishes, as well as a number of complementary beverages. At the onset of operations alcohol will not be served. However, as the business expands the business may acquire a license that allows on-site beer and wine sales. This would drastically boost the contribution margins from this aspect of operations.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the analysis will focus on the current economic climate, the retail entertainment industry, the customer profile, and the ongoing competition that the business will face moving forward.
Currently, the economic climate in the United States is very strong. Interest rates have started to decline, and asset prices have increased substantially over the past 24 months. Given the measures taken by the United States Federal Reserve, inflation is steadily declining. Although there may be future issues with the economy, the Company will not be impacted by this matter. The business will generate substantial contribution margins from access to the facilities, membership, as well as food and beverage sales. Additionally, this is a low cost form of entertainment and many families within the greater Southern New Jersey market will be able to forward the company services at any time.
4.2 Industry Analysis
Each year, retail entertainment facilities generate approximately $6 billion of revenue throughout the United States among 25,000 locations that provide these services. It should be noted that this does not include hotels resorts or other types of large-scale hospitality facilities that provide these services as part of their overall operations.
Overall, the industry outlook is positive period people are always looking for low-cost methods of entertaining themselves and their families in a family friendly environment. One of the most important things about this industry is that the owners of these facilities must continually integrate new types of arcade games, entertainment installations, as well as unique food and beverage options in order to provide a differentiating factor. The business is committed to continually evolving in order to keep pace with what the general public wants in regards to entertainment.
4.3 Customer Profile
Admittedly, the demographics of people that will enjoy entertainment at Family Entertainment Center are very broad. The numerous games, installations, climbing walls, and trampolines will allow the business to find a wide audience throughout the southern New Jersey market. Generally speaking, it is expected that most patrons will have a median household income of approximately $75,000 and will live within 15 miles of the company’s location in Toms River. Additionally, it is further expected that most people will arrive with two children. The average ticket price per visit to the location will be $60 to $80.
4.4 Competition
The ongoing competition that the business will face is relatively modest given the scale and scope of the planned facilities. Although there are other entertainment facilities that operate in a similar capacity within the South New Jersey market, the numerous types of installations coupled with the expansive food and beverage service offered by the Company will set the business apart in this market. The Company will also engage in a wide-ranging marketing campaign that will brand Family Entertainment Center as a preeminent family friendly entertainment center in this market.
5.0 Marketing Plan
The Company will use a number of different marketing strategies in order to create substantial awareness for the business during the development period and after the launch. It should be noted that the business will establish its online presence through both its website as well as through multiple social media channels as the location buildout is completed. This will pique the interest of the general public during this time which will lead to a greater level of patronage from the onset of operations.
5.1 Marketing Objectives
• Use both social media marketing and search engine optimization for the Company’s website.
• Maintain relationships with community organizations that will host events at the location.
• Engage in video marketing through online and television channels.
5.2 Marketing Strategies
Foremost, the business will benefit from the large-scale facility that the company intends to develop in the highly population dense area of Toms River. This facility will feature a substantial exterior signage that shows the wide range of entertainment installations as well as event hosting capabilities. During the development, the business will engage in a wide range of public relations specific for this market area so that people become aware of about what is going to launch later this year. This will allow for a greater number of individuals to come to the facility as soon as its door is open.
In regards to the company’s website, this will be both a search engine optimized and mobile device friendly platform. Images as well as videos of the facility will be featured on the platform. The website will also have ecommerce functionality so that parents can make reservations for events such as birthday parties while also allowing for people to become members of Family Entertainment Center. This platform will also have specific features regarding liability waivers that are required of all patrons that come to the facility.
Over the next three years, the business will engage in a number of search engine optimization strategies that will drive organic traffic to the website. The Company will partner with a regional search engine optimization firm in order to ensure that when specific searches for event hosting locations or family-friendly entertainment centers are conducted specifically for the southern New Jersey market – the Company’s website will appear frequently within the search results.
To complement its website, the business will also maintain a presence among all social media platforms including Facebook, X, Instagram, Tik Tok, and YouTube. On these platforms, the company will upload numerous images of individuals engaging in entertainment activities at the location. Deals and discounts will be frequently distributed on these platforms as well. A major focus of the Company’s social media operations will be to promote the membership program as this provides recurring income for the business.
Similar to the Company’s website, the business will establish its presence on social media during the development. This will allow for greater visibility, and management will place numerous videos and images of the build out of the location during this time.
The business will also conduct direct outreach with a number of community focused organizations that may want to have their events at the company’s location. The business will also provide ongoing financial contributions to area civics organizations as well as to local schools in order to further increase brand name awareness.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Organizational Budget
7.0 Financial Plan
7.1 Underlying Assumptions
• The Company will acquire $500,000 of equity capital and $1.5 million mortgage.
• The business will have an average annual revenue growth rate of 10% per annum.
7.2 Sensitivity Analysis
Given the wealth and population density of the target market, the company’s revenues are generally immune from negative changes in the economy. Family friendly entertainment is something that remains in demand at all times, and the company is providing its services at a reasonable price as compared to the incomes of this area. Additionally, the company will have highly controllable fixed operating costs which will further ensure a substantial return on investment while also ensuring that the debt capital is paid on a monthly basis. The substantial contribution margins generated from all facets of operation will further contribute to the economic stability of Family Entertainment Center.
7.3 Source of Funds
7.4 General Assumptions
7.5 Profit and Loss Statement
7.6 Cash Flow Analysis
7.7 Balance Sheet
7.8 Breakeven Analysis
7.9 Business Ratios
