You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your laser tag business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a laser tag business?
A laser tag facility requires a significant amount of square footage and equipment. Therefore, start-up entrepreneurs are urged to set a budget of $115,000 to $252,000, depending upon region and the specifics of the arena course.
Your budget should include the following:
- Lease building - 5,000 to 6,000 square feet is recommended for interactive course in a standalone building.
- Obstacle course build-out - $40,000 to $100,000
- Obstacle course decor - $72,000 to $104,000
- Point of sale/management software and other miscellaneous items - $9,000 to $22,000
- Laser tag equipment - Guns, vests, scoring software, obstacles for play area. Each taser and vest will set you back $2,000.00 to $5,000.00. Indoor facilities should have an inventory of thirty to forty guns and vests.
If you lack industry experience and are looking for support in this business endeavor, consider investing in one of the many franchise opportunities. Franchise owners frequently offer financing options and can provide valuable insight that could help get your business off the ground in less time.
What are the ongoing expenses for a laser tag business?
Laser tag business owners report an annual cost of $230,000 to $265,000 for operating expenses. These ongoing expenses include:
- Facility lease
- Utilities, phone, etc
- Maintenance, repair, and replacement of equipment
- New game software
- Bank and credit card fees
Who is the target market?
While individuals of every age group enjoy laser tag, your core demographic will be aged six to fourteen. Your younger players enjoy the full experience, immersing themselves in this fun-filled, adventurous world.
With proper arena design and a sound marketing strategy, your business does have the potential to attract adults. Your adult customers are there to challenge their co-workers, enjoy an evening out with friends, or compete against others who take the game more seriously.
How does a laser tag business make money?
Laser tag businesses charge a fee per person for each game played.
How much can you charge customers?
Typically, laser tag will be conducted in timed games and consumers will pay per game. Games last an average of five to seven minutes. The standard price for one game is $8-$15, with a discount added for each additional game or packaged options offered.
How much profit can a laser tag business make?
A profit of $40,000 to $100,000 is achievable within the first three years of ownership. This requires a well-designed facility, a strong marketing strategy, and at least sixteen laser guns in play forty-five hours per week.
How can you make your business more profitable?
To realize long-term growth and success, laser tag arenas must keep things fresh and exciting. Consider implementing these strategies to improve overall profits:
- Endorse competitive events. This establishes a recognizable name for your organization and assists in consistently attracting new and repeat customers.
- Start a league
- Host tournaments
- Add a food court
- Make the entire facility available for large group events
- Offer additional entertainment, such as video games, paintball, and mazes
- Offer redemption tickets for your additional entertainment
- Include mobile laser tag as an extension of your business
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your laser tag business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a laser tag business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Release of Liability
To avoid liability and potential lawsuits, laser tag businesses should have their clients sign a release of liability. Here is an example of one such form.
Recommended: Rocket Lawyer makes it easy to create a professional release of liability form for your laser tag business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
Certificate of Occupancy
A laser tag business is generally run out of a warehouse. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a laser tag business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your laser tag business will be in compliance and able to obtain a CO.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a laser tag business
Established laser tag businesses recommend budgeting for $2,000 to $5,000 per month for your marketing strategy. Because laser tag is enjoyed by so many different types of people, you will need to tailor your marketing efforts towards each demographic.
Your presence in the community will be an integral component to building a loyal following. Consider donating your time and facility to ill and/or disabled children, churches, and other local charities. This goodwill should result in a symbiotic relationship that benefits both for years to come.
Parties and events are a great revenue generator for laser tag facilities. Direct mailers and faxes are effective methods for attracting large groups. Focus your efforts on corporate event coordinators, schools, sports organizations, and churches, emphasizing laser tag as a fun, team-building exercise.
To attract walk-in patrons, partner with a local pizza restaurant. Ask them to attach coupons to the outside of their boxes, either for a fee or in exchange for reciprocal services. Additionally, your business should have an informative website and maintain a consistent social media presence.
Two weeks prior to the grand opening, start advertising on radio stations, during your local news, and through printed mailers. Make sure the local media is present during the event, inviting one of the radio stations to broadcast live. Partner with other small businesses within the community to offer special promotions and gifts for your first seventy-five to one hundred patrons. This inexpensive strategy gets your name out in the community and supports other local organizations.
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How to keep customers coming back
It’s important to remember that your target demographic spans a large number of age and interest groups. To encourage positive word-of-mouth, it is recommended that you allocate a portion of your monthly marketing budget for rewarding return customers. A rewards program that offers prizes for each level met has proven effective. You could also award coupons or prizes to players who return with new customers. This relays the message that you value your customers and incentivizes them to share your facility, and their positive experiences, with others.
Strong customer service is critical to the strength and growth of your laser tag arena. To assist in customer retention, employ of team that is friendly, helpful, and dedicated to ensuring a positive customer experience. Keep the game interesting by rearranging the arena and adding new features. It is also recommended that you schedule routine maintenance on all equipment to ensure everything is in working order at all times.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Laser Tag Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Those who are intrigued by technology, entertaining, and interacting with many different people are best suited for this business venture. If you enjoy a high energy work environment, a laser tag operation might be perfect. For many, the idea of owning and operating a laser tag business has been a longstanding dream and, with the proper preparation, this dream can become a reality.
What happens during a typical day at a laser tag business?
Upon opening your business, you will likely want to take a more active role in the day-to-day operations of the facility. As the arena starts to generate more revenue, additional members of your team can be added to take over management of your enterprise.
The following tasks will require your attention on a regular basis to ensure your laser tag business’ success:
- Speaking with current and potential clients who are interested in hosting events at the facility.
- Routine maintenance and repair of equipment
- Safety check of laser tag course
- Checking inventory and place order for items you are low on
- Networking and marketing to build a loyal customer base
- Managing staff and vendor interactions
- Administrative and accounting duties
What are some skills and experiences that will help you build a successful laser tag business?
Each day, you will interact with customers, your staff, and those that fit the marketing profile. Therefore, you must possess strong leadership skills, particularly in communication and delegation. An understanding of the target demographic would additionally help solidify your marketing and networking skills, as well as ensure a playful and fun experience for each customer. To ensure long-term growth in this industry, strong strategic business management skills would also prove beneficial.
To get a feel for the business, customers, and how you want to design your facility, entrepreneurs are urged to spend some time working in the industry. The Laser Tag Convention is an annual event that offers business owners insight into industry standards and trends and is a great way to network within the community. Additionally, the Laser Tag Owners Association is a wealth of information for those just starting out in the industry.
What is the growth potential for a laser tag business?
As one of the most profitable businesses in the entertainment industry, laser tag facilities generated over $375 million dollars in the United States last year. This industry offers a profit margin of up to 40%, further demonstrating its earning potential.
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One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
What are some insider tips for jump starting a laser tag business?
Industry leaders offer the following advice:
- Never underestimate the importance of your equipment. It should be light enough to be carried by children, yet heavy duty enough to attract competitive laser tag enthusiasts. Hit accuracy range between phasers is critical.
- Before investing in equipment, research the manufacturer. Testimonials offer valuable insight into equipment quality, as well as manufacturer support.
- The look and overall design of your facility, particularly the obstacle course, is equally as important.
- Keep in mind that this is a limited occupancy activity. To ensure adequate space, industry leaders recommend approximately 166 square feet per player.
- Consult with a contractor before committing to a building. Specific safety and construction guidelines must be met.
- Adjust your hours to accommodate your demographic.
- To reduce liability exposure, have each patron sign a waiver before entering the laser tag course.
How and when to build a team
Your team should consist of: a general manager, two to three shift managers, laser tag attendants, and party hosts. Before opening your doors, carefully interview prospective employees. Your team can consist of individuals from all age brackets; just make sure each member of your staff is properly trained on the equipment, safety, and rules and regulations. They are also the face of your business and must contribute to each patron’s positive experience.