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 nerf arena. 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 nerf arena?
Your Nerf arena will require a significant amount of space, either indoor or outdoor, and equipment. Total costs depend on a number of factors, including: whether it will be an indoor or outdoor facility, what type of “courses” you plan to offer customers, and how large of a staff you plan to employ. Start-up entrepreneurs recommend a budget of $30,000 to $75,000, depending upon the specifics of the arena and the region in which you reside.
Consider the following when planning your budget:
- Lease building - a minimum of 2,000 to 5,000 square feet is recommended.
- Build-out and decor for arena course - $5,000 to $10,000
- Insurance - cost varies depending upon a number of factors. Seek the advice of a trusted insurance agent.
- Nerf guns, ammunition, eyewear, and colored vests - guns range anywhere from $15 to $75. Ammunition refill packs can run upwards of $40.
- Point of sale/management software - items - $3,000 to $9,000
While this is a fairly new idea in the entertainment industry, several Nerf arena owners are now offering franchise opportunities. Entrepreneurs who lack relevant experience are encouraged to consider these options when constructing their business plan.
What are the ongoing expenses for a nerf arena?
Nerf arena business owners report an annual ongoing expenses of $155,000 to $230,000, depending upon the size and scope.
Ongoing expenses include the following:
- Utilities, phone, etc
- Marketing and printed material
- Business management software upgrades and credit card fees
- Miscellaneous supplies
- Routine maintenance, repair, and replacement of equipment
Who is the target market?
Fortunately, Nerf arenas are the type of adventure that appeals to individuals of every age group. Your core audience will be aged six to fourteen. However, many facilities have found that, with the right course design and equipment, much of their revenue is derived from corporate groups looking for a fun way to solidify business teams and reward employees for their hard work.
How does a nerf arena make money?
Nerf arenas generate revenue from each individual that visits the establishment. A majority of the business’ income will come from groups that reserve the space for a birthday party or company event.
How much can you charge customers?
Customers are charged per hour, with a national average of $8 to $12 per hour. Rounds generally last three to five minutes, allowing players to get in twelve or more rounds in an hour. Admission includes basic Nerf guns and ammo, with the option to upgrade for additional fees.
How much profit can a nerf arena make?
Annual profits depend upon a number of factors. A well-designed facility of 3,000 square feet, has the potential to generate profits upwards of $50,000 annually in the first three years.
How can you make your business more profitable?
To maximize profits, maintain a facility that keeps up with the latest trends and a course consistently changes. Boost excitement for Nerf gameplay by implementing the following strategies:
- Offer something different and exciting on the weekends. Blacklight play has proven popular at other facilities across the country.
- Market to schools and churches in your area, offering your facilities for team sports practice during off hours.
- Host tournaments and consider starting a Nerf league.
- Offer food and drink.
- Focus on large parties and group events.
- Include other entertainment options, such as an arcade, to attract those who aren’t interested in Nerf battles.
- Mobile Nerf gameplay will attract an additional demographic and is a great service for families wanting to host birthday parties at their homes.
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 nerf arena 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 Nerf arena. 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 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.
Certificate of Occupancy
A nerf arena is generally run out of a large indoor or outdoor space. 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 nerf arena.
- 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 nerf arena will be in compliance and able to obtain a CO.
To avoid liability and potential lawsuits, Nerf arenas should have their clients sign waivers.
An example of an appropriate waiver can be found here.
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 nerf arena
Since this is a fairly new business idea, proper marketing is critical for long-term growth. Your marketing strategy should be tailored to reach each age group. A monthly budget of $1,000 to $2,000 is recommended.
A strong social media presence, as well as a simple, yet informative website, is a critical component to any marketing strategy. This will help spread the word regarding upcoming events and special promotions. Target large groups, such as corporate event coordinators, schools, and churches, through direct mailers and printed coupons. Be sure to emphasize that Nerf battles are an effective and entertaining method for team-building.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Successful entrepreneurs recognize the value of maintaining a strong presence in the community. Consider donating your time, facility, and/or other resources regularly within your district. By giving back to the community, you will build a lasting reputation as a “family man/woman.” Customers note these acts of goodwill and will go out of their way to spread the word. This is what helps build a loyal following.
Additionally, a rewards program is an effective way to ensure repeat customers. This sends the message to customers that you value their business and recognize that they are the reason your doors remain open.
Regardless of what strategies you implement, strong customer service should always remain priority number one. Your staff should be friendly and dedicated to delivering a positive experience every time. Keep the gameplay fresh by following the industry’s latest trends and regularly changing out obstacle courses. If visitors have the course memorized, they will become disinterested and seek out other forms of entertainment.
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 Nerf Arena In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
An individual who enjoys working in a fast-paced, entertaining environment would be the ideal candidate for this business venture. Nerf arena entrepreneurs should enjoy interaction with customers of all ages and backgrounds, bringing out the kid in all of us.
What happens during a typical day at a nerf arena?
A Nerf arena owner will spend a good deal of time actively playing with customers, as interaction with customers is priority number one. Visitors who walk away with a smile on their face will not only become regular customers, they will share their experience with others in the community. Direct involvement in game play will safeguard against injury. Additionally, it will offer your team an opportunity to note customer feedback, adjusting business strategies accordingly.
In addition, your Nerf arena team will need to:
- Place vendor orders when supplies run low
- Routine maintenance and cleaning of arena and equipment
- Safety check of course and all equipment
- Conduct market research regularly to ensure your business keeps up with the latest trends
- Schedule parties and host events
- Implement marketing strategy and network within the community
- Accounting and administrative duties
What are some skills and experiences that will help you build a successful nerf arena?
Experience in the entertainment industry, particularly one involving gameplay, would prove beneficial. This would help ensure the safety of your clients and offer a clearer understanding as to what visitors expect from your facility.
Attention to detail and strong leadership skills are critical for the entrepreneur seeking long-term success and growth. Additionally, since your days will be spent interacting with customers and staff, sound social and communication skills will be paramount to your success. This will assist in networking and implementing a marketing strategy and will leave a lasting impression on your customers, ensuring a more positive experience. If you do not have business management experience and knowledge, consider taking a basic business course at your local college.
Battlefield Sports University is a wonderful resource for those starting out in this industry. They offer insider tips on everything from marketing to technical advice and industry trends.
What is the growth potential for a nerf arena?
Nerf guns have regained popularity over the last decade, offering entrepreneurs a unique opportunity to invest in a fairly new business venture. This growing trend, however, has yet to reach many cities across the U.S. Those who possess both vision and drive can expand their enterprise to entertain Nerf gun enthusiasts in every major city.
TRUiC's YouTube Channel
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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 nerf arena?
Industry leaders offer the following advice to those interested in starting their own arena:
- Keep your target market in mind when investing in equipment. Offer a variety of different Nerf guns, including ones that are light enough to be carried by young visitors and heavy duty ones that appeal to the Nerf enthusiast.
- Make sure your arena offers the “three P’s” - parking, space for battle play, and a place to “pee.”
- Your hours of operation are critical to the arena’s overall success. The facility should have daytime hours for organizations who wish to host business events and evening/weekend hours for children to attend during non-school hours.
- Make sure your course is exciting and includes places for customers to hunker down. Consider changing the course periodically to keep things interesting for repeat customers.
- Much like laser tag, this is a limited occupancy activity. When designing your space, at least 165 square feet per player is recommended.
- Each player should sign a waiver before entering battle play to help reduce business liability.
How and when to build a team
In the beginning, many Nerf arena business owners run the entire facility on their own. As the business grows in popularity, however, it may be necessary to build a small team. Employees of any age are acceptable, as long as they are dedicated to delivering a positive experience. They should be outgoing and friendly, properly trained on all equipment, and should possess safety and first aid knowledge should an emergency occur.