Start a rage room by following these 9 steps:
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 guide to starting your rage room. 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 rage room?
Your major initial costs of establishing a rage room can be kept to a minimum. For $5,000 or less you should be able to start operating. Here’s where you’re likely to spend your money:
- Rental space - You’ll need a room or building to set up your tableaus and book customers. Also, keep in mind that you’ll need storage space for all of the breakable objects you must regularly acquire. This might be provided with your rental, or perhaps you can store items in your own garage or basement. Rental rates vary greatly depending on your region, city and even the part of town where you set up operation, but it’s likely to be your highest cost. Your space might be a vehicle outfitted as a rage room. If you go in that direction, you might have to buy or rent a trailer or otherwise spend to outfit your mobile vehicle appropriately. And of course your costs will go way up if you must buy a vehicle to go into mobile operation.
- Breakable goods - If you’ve come up with winning strategies for finding the objects, this cost might be minimal. Try to get most of what will be destroyed for free.
- Liability insurance - You’re going to operate as safely as possible, but minor injuries could still happen. And your landlord might refuse to rent to you unless you acquire liability insurance, so talk to an insurance broker even before you’ve signed your lease.
- Safety gear - Buy hard hats, goggles and work gloves so that your customers don’t get hurt by flying glass. You’ll also provide bats or other tools of destruction.
- Publicity/promotion/advertising - Start by promoting your business through free media. You should be able to get stories placed online and in local media. It’s only as your business loses its novelty or acquires competitors that you should consider paid advertising.
- Employees - It might be beyond your initial budget to hire any employees. Instead, seek out the voluntary services of close friends or family members. When your business expands you can start to think about paying for help.
Read our rage room purchasing guide to learn about the materials and equipment you'll need to start a rage room, how much to budget, and where to make purchases.
What are the ongoing expenses for a rage room?
Once you've figured your rent, insurance and employee costs (if any) into your equation, the only variable costs are the acquisition of breakable items and the cost of promoting your business. As mentioned, you'll want to pay as little as possible--or nothing--for the articles to be destroyed, and you'll figure out what that cost is over time. As for promotional costs, first concentrate on social media and free publicity. That should carry you for at least the first several months. While that's going on, ask your customers where they focus their attention. That will give you an idea of where she should put your money if you must start paying for media attention. As to how much money that will be, that depends on media costs in your city. But you can go online and get ad rates.
Who is the target market?
Most customers will be able to see the humor in the mock violence. They will take their swings to let off steam and have a good time without causing any meaningful destruction. This could include customers booking the space for birthday celebrations, bachelor or bachelorette parties or stressed workers on lunch break.
However, it may be beneficial to attract customers with a more critical need to vent. This might include individuals or groups who’ve become recently unemployed or who are involuntarily out of a relationship or otherwise filled with unreleased anger.
How does a rage room make money?
A Rage Room makes money by charging more for the experience than the cost of acquiring the breakable objects that will be arranged for destruction. Overhead costs must also be covered. These include:
- Rental of the room or rooms
- Energy costs, if not included in the rent
- Paid advertising and other expenses incurred in promoting your business
- Employee costs, which can include staff to arrange the tableaus, obtain costumers, host bookings, provide security and cleanup after one booking and prepare the room for the next—though these tasks may be carried out by the owner himself
How much can you charge customers?
Prices—and even the methods to set the rate—can vary considerably. The Smash Shack in Jacksonville, North Carolina charges by the number of items demolished. Rates start at $10 for 15 items, and escalate to $75 for 50 targets.
The Rage Room in Dallas charges by time, starting at $25 for five minutes of destruction. And Tantrums LLC in Houston charges a flat rate of $85 for a theme room destruction experience.
The point is, rates vary depending on location and the experience offered. Survey your audience to find out what they’d pay. You’re better off starting modestly and escalating with your growing success than to start too high and turn off your customer base.
How much profit can a rage room make?
Start by adding up all of your anticipated expenses--from rent to employee costs to utilities, insurance, interest on money borrowed, promotional expense and the acquisition cost (if any) of the items to be destroyed--and figure out what you'll be spending. Then ask yourself what the minimum amount of a salary is that you require. (Best scenario is that you've saved enough to go without salary for a year.)
Add up all of those costs, then figure how many days you're going to be open and how much you plan to charge per person or per booking. How many groups can you expect to book on a typical day? Provide an estimate in two scenarios. For one, be very conservative and then be more aggressive with the other. Your estimated profit will be the difference between your expenses and your prediction of revenue generated. Is it enough?
Once you're actually in business for a few months or half a year and can plug in real numbers you'll get a better idea of the profit potential of your business. If it's not enough, it's time to get creative and figure out more services to offer or ways to expand your audience base.
How can you make your business more profitable?
One prime source of revenue enhancement will be in figuring out how to find a steady stream of breakable objects at the lowest possible price. You’ll want to regularly seek out garage sales, flea markets and curbside castoffs. Homeowners regularly put out broken televisions, sinks, toilets, washers, dryers, cabinets and other large and small breakable objects for refuse pickup. Get to know garbage day for every nearby neighborhood and community, and show up the night before with a pickup truck. The more objects you can find for free, the greater the profitability potential of your operation.
Once you’ve figured out the basics, consider expanding by adding rooms or a mobile component to your operation.
Finally, consider associated services that might generate additional income? For example, consider offering beverages and snacks and professional videography services to commemorate the visit.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. 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.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your rage room is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
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 rage room business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
In addition, certain local licensing or regulatory requirements may apply. 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.
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.
Release of Liability
It is strongly recommended to have customers sign a liability waivers. Rage rooms can be high-risk environments, and a liability waiver will help protect your business in the event of an injury. An adult guardian should sign for children under the age of 18. Though waivers should be custom-made, this example liability waiver can serve as a helpful example.
Recommended: Rocket Lawyer makes it easy to create a professional release of liability form for your rage room 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.
In order to play music in a business setting, permission must be acquired from the composer or license holder. Typically, it is possible to obtain a “blanket” license allowing a businesses to play music owned by a large catalog of artists and recording studios. Such licenses can be obtained from Performance Rights Organizations, such as ASCAP or BMI.
Certificate of Occupancy
A rage room business is generally run out of a warehouse or large storefront. 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 space:
- 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 rage room 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 rage room:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for you business’ location to ensure your rage room 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 rage room
- Invite the media - As mentioned, initial media interest should be high. The rage room concept has only been around since about 2008, and the media is always on the lookout for a good story. Invite the media to send a still photographer or film crew to witness a booking.
- Use social media - Set up a Facebook group under your company name as well as a Twitter feed and Instagram account. You can use your smartphone to video record a booking and post it to your YouTube rage room account. Then ask around and find out what other social media your prospective customers are using. The beauty of social media is that it’s free and pervasive.
- Reach out - What sort of customer base would you like to attract? If you’re thinking about birthday parties, bachelor and bachelorette events, hang out where people are planning such celebrations. For instance, consider running an ad in magazines or on websites that attract brides-to-be. If you’re operating from a mobile base, try to position your rage room near a major employer for stress breaks or after-work venting sessions.
How to keep customers coming back
This is a critical talent. Since the concept is so new, you’ll have to start by explaining what a rage room is. Do you have experience or a talent getting booked on local television or radio talk shows? Can you entice a journalist to write a story? Perhaps a television news crew could even be invited to film a session.
You should also be a good communicator on Facebook, Twitter, YouTube, Instagram and other social media where your customers are likely to check in. Donna Alexander, who runs the Anger Room in Dallas, has managed to gain national and even global interest with stories placed on ABC News, the Huffington Post and in the pages of the New York 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 Rage Room In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
The ideal rage room business owner will be able to obtain breakable content on a regular basis at as low a price as possible and keep the space filled and arranged so customers can book time to let off steam. She or he must see opportunity in the novelty and the humor of the business and know how to get the word out.
This business demands creative thinkers who can find ways to bring customers in the door and provide an experience that will encourage repeat business and positive word of mouth.
What happens during a typical day at a rage room?
- Acquiring an always changing inventory of breakable objects at low or no cost
- Setting up the breakable objects in tableaus what resemble real-life environments, then quickly removing the destruction from one booking to quickly set up another tableau for the next
- Promoting business in local and social media through both paid advertising and free publicity
- Providing an overall customer experience that will be gratifying and enjoyable, encourage return visits and generate positive word of mouth
What are some skills and experiences that will help you build a successful rage room?
Your prime talents will be creativity in acquiring breakable goods, promoting your business and drawing customers.
What is the growth potential for a rage room?
A Rage Room business is limited by the number of rooms it can provide and fill, the customers it can draw and the rates it can charge for bookings.
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Take the Next Step
Find a business mentor
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.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
How and when to build a team
Your first “employees” might be family and friends donating their time to help you get started. Or you might have to do everything solo to save time. But as you expand, you’ll want to start hiring people who are responsible, responsive and promotional. Your team should see the fun in the concept and feel as passionate about the business as you are.