Should I Start an LLC for My Board Game Cafe?

Starting a limited liability company (LLC) for your board game cafe can provide several benefits.

Most importantly, an LLC structure offers limited liability to its owners, which can protect their personal assets from lawsuits and creditors.

For a board game cafe, lawsuits can arise from things like IP law disputes, as well as from one of your waitstaff accidentally spilling a hot drink on a customer.

LLCs are also affordable, highly flexible (from a tax point-of-view), and can make your board game cafe seem more credible.

Recommended: Use Northwest to form an LLC for $29 (plus state fees).

Do I Need an LLC for a Board Game Cafe?

LLCs are a simple and inexpensive way to protect your personal assets and save money on taxes.

You should form an LLC when there's any risk involved in your business and/or when your business could benefit from tax options and increased credibility.

LLC Benefits for a Board Game Cafe

By starting an LLC for your board game cafe, you can:

Protect your savings, car, and house with limited liability protection
Have more tax benefits and options
Increase your business’s credibility

Limited Liability Protection

LLCs provide limited liability protection. This means your personal assets (e.g., car, house, bank account) are protected in the event your business is sued or if it defaults on a debt.

Board game cafes will benefit from liability protection because of the risk of lawsuits for personal injuries, property damage, and libel.

Example 1: After eating a cheese and ham sandwich served in your board game cafe, a customer starts feeling a bit drowsy and decides to leave. A week later, they contact you, claiming that they’ve got food poisoning and demanding compensation. If they file a lawsuit against your LLC, limited liability will ensure that your personal assets remain protected regardless of how the claim progresses.

Example 2: You acquire two large business loans from separate banks, which you’ll use to expand your brand and start a second board game cafe. Since the loans were guaranteed by your business, you will not be held personally liable if your business happens to accrue significant debt and is unable to pay the loans back in the future.

Example 3: One of your employees trips over a game of Monopoly and ends up fracturing their elbow. After claiming that this could have easily been avoided if you had taken more steps to proactively prevent workplace accidents, they file a lawsuit against you for medical damages. As a result of the limited liability offered by your business’s LLC structure, your personal assets will remain safe regardless of whether your business is required to compensate the claimant.

Example 4: A waiter spills hot coffee on a patron, causing burns to their arm. The patron sues your business for the resulting medical damages.

An LLC will also protect your personal assets in the event of commercial bankruptcy or loan default.

To maintain your LLC's limited liability protection, you must maintain your LLC's corporate veil.

LLC Tax Benefits and Options for a Board Game Cafe

LLCs, by default, are taxed as a pass-through entity, just like a sole proprietorship or partnership. This means that the business's net income passes through to the owner's individual tax return.

The business’s net income is then subject to income taxes (based on the owner's tax bracket) and self-employment taxes.

Sole proprietorships and partnerships are taxed in a similar way to LLCs, but they do not offer limited liability protection or other tax options.

S Corp Option for LLCs

An S corporation (S corp) is an IRS tax status that an LLC can elect. S corp status allows business owners to be treated as employees of the business (for tax purposes).

S corp tax status can reduce self-employment taxes and will allow business owners to contribute pre-tax dollars to 401k or health insurance premiums.

The S corp status requires that the business pay the employee-owner(s) a reasonable salary for the work they perform.

In addition, the business might need to spend more on accounting, bookkeeping, and payroll services. To offset these costs, you'd need to be saving about $2,000 a year on taxes.

We estimate that if a board game cafe owner can pay themselves a reasonable salary and at least $10,000 in distributions each year, they could benefit from S corp status.

You can start an S corp when you form your LLC. Our How to Start an S Corp guide will lead you through the process.

Credibility and Consumer Trust

Board game cafes rely on consumer trust. Credibility plays a key role in creating and maintaining any business.

Businesses gain consumer trust simply by forming an LLC.

A growing business can also benefit from the credibility of an LLC when applying for small business loans, grants, and credit.

Northwest will start an LLC for you for just $29 (plus state fees).

Get Started

How to Form an LLC

Forming an LLC is easy. There are two options for forming your LLC:

You can hire a professional LLC formation service to set up your LLC for a small fee
Or, you can choose your state from the list below to start an LLC yourself

Select Your State

For most new business owners, the best state to form an LLC in is the state where you live and where you plan to conduct your business.

Do LLCs Need Insurance?

LLCs need business insurance in order to protect their business assets. For a business such as a board game cafe, this may include board games, furniture, and potentially kitchen equipment.

The limited liability that is offered by an LLC structure protects the personal assets of the LLC’s owners only.

Common Situations Business Insurance May Cover for a Board Game Cafe

Example 1: A waiter spills scalding hot coffee on one of the patrons playing a game at his table. The spill causes serious burns, and the patron is rushed to the hospital. If liable for damages, general liability insurance would probably help your company pay whatever a court found it to owe or any settlement reached between you and the injured patron.

Example 2: A customer is playing a game and eating the salad he ordered, but he has a serious allergic reaction to one of the ingredients. After receiving medical care, he decides to sue your cafe. If liable for the incident, general liability insurance would probably help to pay for the damages incurred or any settlement agreed upon by you and the injured party.

Example 3: A custodian fails to leave a wet floor sign, and a customer slips, landing on his tailbone. Part of the bone has fractured, and he sues your cafe. If held liable by the court, you could likely rely on general liability insurance to help cover the damages owed.

Other Types of Coverage Board Game Cafes Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance board game cafes should consider obtaining:

Commercial Property Insurance

This is a big one for board game cafes. Not only do they run a little restaurant/bar, but they also operate a board game store on the same premises. Disasters like fire or violent weather can lead to a loss of equipment, supplies, kitchen machinery, and pricey inventory. The board games alone run an average of $40–$50, and some games go for as much as $100+. That’s a lot of crucial inventory loss. A serious board game cafe needs a commercial property insurance policy to keep its material assets covered in the event of the aforementioned disasters or other catastrophes. This policy will cover commercial material goods as well as owned commercial real estate impacted by the incident.

Crime Insurance

Due to a resurgence over the past decade, the board game industry is alive and stronger than ever. Part of its resurgence into pop culture and its economic viability has to do with the new nature of board game content, which is often extensive, complex, and designed to meet customers’ expectations for innovative gaming experiences.

This means that board game cafes are keeping some very expensive inventory, much of it neatly packaged for quick removal. Should employee dishonesty cost your business thousands in lost inventory or cash, crime insurance provides your business coverage. It can also cover computer fraud losses and the theft of client property.

Liquor Liability Insurance

Many board game cafes provide alcohol as part of their versatile business models. Board games are social events, and where there is recreational socializing, there is often alcohol. Gaming and drinking can play well together, but if your business opts to provide alcohol to its patrons, a liquor license is not only important, it’s required by law.

Events that are normally covered by general liability insurance may be covered by a liquor liability policy instead — as long as alcohol is reasonably determined to be a significant causal factor in the damage. Intoxicated patrons may be acting of their own accord, but your business could be found liable for their destructive behavior anyhow. Keep your board game cafe covered for intoxication incidents out of its control with liquor liability insurance.

Should I Start an LLC FAQ

Choosing the right business structure depends on your business’s unique circumstances and needs. However, unless your business is very low risk (like a hobby), an LLC is likely the better option.

Visit our LLC vs. Sole Proprietorship guide to learn more.

At a minimum, you’ll need general liability insurance, workers’ compensation insurance, and commercial property insurance.

Read our Board Game Cafe Business Insurance article for more info.

The main costs you’ll have include leasing a space for the cafe, purchasing furniture, purchasing board games, and preparing food and beverages. When it comes to ongoing costs, you will need to pay for rent and utilities, as well as restocking fresh kitchen supplies. Depending on the size of your cafe, you will also have to hire employees.

Visit our How to Start a Board Game Cafe guide to learn more about the costs of starting and maintaining this business.

Payroll, lease payments, utilities, and facility maintenance represent the primary ongoing expenses.

Learn more about running a board game cafe.

Board game cafes make money by charging customers for playing games and for cafe items.

Learn more about starting a board game cafe.

A board game cafe provides a space specifically designed for people who want to play board games. Most of these cafes also offer food and drinks.

Customer volume and location are the most important factors in determining a board game cafe’s profitability. The board game market is a billion-dollar industry, and cafes are popular destinations for many individuals.

Learn more about starting a board game cafe.