How to Write an Arcade Business Plan + Free Sample Plan PDF

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Free Download: Sample Entertainment Business Plan Templates

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Once headed for extinction, the arcade has made a comeback. 

There are now nearly 7,000 arcades and entertainment centers across the U.S., and the sheer range of gaming options means there are plenty of opportunities for entrepreneurs looking to carve out a niche in their community.

But to build a successful business around people’s love of gaming, you need to make sure that:

• There’s a big enough market for your arcade to be financially viable.
• You’re offering something that competitors aren’t.
• You have a plan to staff the arcade and keep machines operational.
• If you’re operating an arcade bar, you need to ensure minors aren’t getting access to alcohol.

You can account for all of these concerns and improve your chances of starting a profitable arcade by writing a business plan. Plus, if you’re looking for a bank loan or investment to cover major costs like new arcade machines, they’ll need to see your plan before they’ll consider funding you.

Those are just a few of the concerns an arcade business owner might deal with. And it’s why writing a business plan will keep you focused on your market opportunity and run your operation smoothly. 

What should you include in an arcade business plan?

Here are a few sections we recommend including in an arcade business plan:

• Executive summary
• Products & services
• Market analysis
• Operational plan
• Financial plan

There’s a traditional format that you can follow when writing your business plan.  But don’t feel like you have to follow that structure if you aren’t looking for funding. 

At its heart, a business plan is about creating a growth strategy for your arcade, so focus on the sections most relevant to your situation.

Executive summary

The executive summary introduces the reader to your arcade business. It’s typically written last, because it summarizes your whole plan. But it needs to be engaging.

Start by outlining your arcade’s unique concept and mission. Do you focus on:

• Classic arcade games
• Cutting-edge gaming systems (i.e. virtual reality)
• Competitive play (tournaments)

Next, highlight what sets you apart. Maybe you have a massive game selection, exciting prizes to win, or an appealing food and beverage concept. Tie these features to the desires of your target market and the role your business will play in the community.

Briefly touch on your qualifications, financial outlook and long-term goals as well. Do you have experience in business, entertainment, or the gaming industry? If you’re seeking funding, how much do you need, and how will you use it?

Products and services

The products and services section details the experiences you offer customers, and revenue streams you generate. Start with your core service.

Arcade Games

List the types of games you offer, such as:

• Classic cabinets
• Pinball machines
• Modern gaming consoles
• Cutting-edge gaming experience like VR
• Interactive games

Some arcades specialize in a type of gaming experience, like retro or sports games. If you’re focusing on a specific genre or era, explain in your business plan why choosing that segment over others gives you an advantage.

Then think beyond the arcade games themselves. Additional revenue streams may include:

• Food and drinks
• Events and tournaments
• Merchandise
• Party packages

If you’re already operational, mention any services that have proven successful.

Market analysis

To build a successful arcade with a steady customer base, you must deeply understand your target customers and the arcade industry.

A good place to start in your market analysis is to identify the characteristics of your ideal player:

These include demographic factors, like:

• Age
• Geography
• Income level

Are you catering to teens, young adults, or families? Do you expect your customers to be mostly from the area around your arcade, or can you draw people from farther away? Based on average incomes in your area, do you expect cheaper, coin-operated games to be your most popular attraction? Or can you get customers to pay more for premium games, meals, and drinks?

You should also consider the psychographic characteristics of your customers. These are about your customers’ motivations. Are they seeking:

• Stress relief
• Social outings
• Nostalgia
• Serious competition

The answer to these questions can help determine how to position your arcade to potential customers, as well as the types of arcade games to purchase.

Competitive analysis

Understanding the competitive landscape is an extension of your market research. But due to the complexity of the arcade gaming competition, it’s worth separating into its own section.

Start by listing your rivals:

• Direct Competitors: Other arcades, especially those with a similar concept or location.
• Indirect Competitors: Family entertainment centers, bowling alleys, home gaming systems – anywhere people spend leisure time and money.

Analyze their strengths and weaknesses. Consider:

• Game Selection: Do they offer a similar mix, or specialize in specific genres?
• Atmosphere: Is it modern, family-friendly, or geared toward serious gamers?
• Pricing & Promotions: How do their prices compare to yours? Do they run specials or loyalty programs?
• Customer Experience: Look at online reviews – what do people praise or criticize?

The key to your competitive analysis is determining what will make people choose your arcade over other options. It could be that you have a larger selection of games, or a more approachable atmosphere. Clearly spell out your competitive advantage in your business plan.  

Operational plan

Your operational plan maps out the day-to-day work that keeps your arcade running smoothly. Here’s what to cover:

Describe your space

• Square footage
• Layout
• Special features (party room, kitchen, etc.)

If you haven’t secured a location, outline your ideal requirements.

Equipment

• Arcade machines
• Coin and token machines
• Kitchen and bar equipment
• Food and drink supplies
• Cleaning supplies
• Prizes
• Merchandise

Archase games require periodic upkeep, so be sure to outline your plan for regular maintenance and how you’ll handle unexpected breakdowns. Also, detail where you will source games, parts, prices, food and drinks.

The complexity of your operational plan depends on your arcade’s size and staffing needs. A simple arcade might have a shorter section, while a large entertainment complex will need a more detailed plan.

Financial plan

Your arcade financial plan is where you demonstrate that you can turn your vision into a sustainable business that operates for years to come.

Startup Costs: If you’re seeking funding to start an arcade, detail your costs to launching, like buying arcade machines, building renovations, and initial inventory needs. Be sure to demonstrate exactly how those funds will help you succeed.

Sales forecast: Project your revenue from game plays, prizes, food and drinks, events, and any other income sources. Be realistic, especially in the early months.

Expense Budget: Think carefully about all of your costs, then list them out. Typical expenses include:

• Rent and utilities
• Staffing
• Game purchases/leases
• Maintenance & repairs
• Supplies (prizes, food, etc.)
• Insurance, marketing, licensing, and fees

Profit & Loss (P&L): This combines your revenue streams and expenses, demonstrating whether your projections show a profit.

Cash flow statement: Regardless of how successful you think your arcade will be over time, you always need to have enough cash on hand to pay bills and avoid running into shortages. 

Balance Sheet: An overview of your arcade’s financial health, listing assets (like your games), liabilities (loans), and overall equity.

Important Notes

Assumptions: Be clear about any predictions you’re making (number of customers, growth rate, etc.). If you’re writing your business plan in hopes of getting a bank loan, they’ll want to see that you’ve thought through your projections.

Industry Research: Try to find sample financials from other arcades to make sure you’re not missing any key expenses. At the very least, research typical arcade expenses online.

Download your free entertainment sample business plan

You can download any of our entertainment business plan samples for free right now to get inspiration for your own plan. Or, browse the Bplans library of over 550 free sample business plans to see what plans in other industries look like.

With competition from other arcades, large entertainment centers and home gaming systems, identifying your niche as an arcade destination is crucial for your success.

Writing a business plan keeps you disciplined in your entrepreneurial journey by ensuring you focus on gaming experiences with a high return on investment. And remember, a bank or investor won’t fund you without one.