Are you interested in opening your own gaming lounge? Are you unsure where to begin your journey? If you are serious about your future business, it is important to take all the necessary preparation steps. You should start the process with thorough planning and with an accurate gaming lounge business plan. The purpose of such a plan is to make sure you are aware of your initial costs, target audience, expenses, and potential issues. Seeing this information right before your eyes in the business plan will help you to get the best idea of what to expect. Also, if you are interested in attracting investors, you have to take your business plan seriously, as it can decide whether someone will invest their money or not. In this guide, you will find all the information you need to get started.
So, why do you need to have a detailed gaming cafe business plan? Starting any business is a challenging process, especially if you take into account the competition. The goal of a business plan is to make the process of getting your café up and running much easier. When coming up with your plan, you should collect as much data as possible, compare pros and cons, and choose the most appropriate format of writing. It is highly important to consider the cost of opening a gaming lounge, the equipment you will need to invest in, and how much you will have to pay your employees. On top of that, find and evaluate different ways to promote your services that will be relevant to your particular target audience. This guide is intended to provide you with important pointers, so you know where to begin and how to scale from there.
Gaming lounge business overview
Internet cafes have been around for quite some time, and it seems that they won’t be going anywhere soon. Since the beginnings of the Internet, people who were interested in using it yet couldn’t afford to have the connection at home would go to cybercafes. First cafes of this type were not as impressive as modern once but they have definitely come a long way. Cybercafes are no longer these boring places with several computers where you come to send an email. Current cafes create a comfortable atmosphere and offer modern equipment that not everyone can afford to have at home. It is not a secret that video games have become extremely demanding in terms of equipment, so it’s no wonder that people still go to cybercafes.
There is a lot of room for creativity in this business, as internet cafes can be quite different in their design, formats, and services they offer. For instance, a simple internet café can be turned into an elaborate gaming lounge that hosts tournaments. Or, it can be made into an esports establishment where players can enjoy using VR technology and playing on different gaming consoles.
When it comes to people who are interested in starting a gaming lounge business, they can be divided into three main groups:
- Gaming fans that want to take their hobby to the next level. The majority of such people have advanced computer skills and they understand what gaming equipment is necessary for successful gaming. They keep up with the latest trends in the gaming industry, which means they know what they need to have in a gaming lounge to make it interesting for other people. It is common for this category of businessmen to start with a smaller budget and expand it over time.
- The next category is people with smaller budgets that are not aware of all the intricacies of the gaming industry. They have read somewhere that opening a gaming lounge can be a profitable activity and they want to get involved. Sometimes such people don’t understand that they will have to spend a lot of time researching the peculiarities of this business to be able to succeed.
- Another category of people who may be interested in this activity is entrepreneurs who simply want to invest their money in some type of business. They may not have the knowledge of the gaming industry or even be gamers themselves. Their advantage is that they may be able to invest a large sum of money in their establishment right from the start. It is common for such entrepreneurs to begin their businesses on a large scale and even host tournaments in their gaming lounges.
Whether you belong to one of the mentioned categories or not, having a video game lounge business plan is a must. This article was written to help you come up with the best plan regardless of the fact if you have any previous experience or not.
Pros & cons of opening a gaming lounge
The first thing you should do before you start any business is to make sure that you understand all the pros and cons of it. You should spend some time coming up with the most crucial advantages and disadvantages, which will help you see whether this business activity will be worth your effort. Even if we consider opening one type of business, like a gaming lounge, the pros and cons list can differ quite significantly from one person to another. One person’s advantage is another person’s disadvantage, so you should keep that in mind. We have come up with a list of common pros and cons that you should look into.
Some of the pros associated with a gaming lounge business include the following:
- Low starting cost for gaming lounge business
Obviously, there are businesses out there that require even smaller initial investments. However, it is possible to open a gaming lounge with quite minimal investments compared to other ventures. The biggest part of expenses goes for purchases of computers and consoles. You will need about $50,000 in the beginning, which is not that much if you look at the initial expenses of other businesses.
- Small competition
It is not a secret that cybercafes have been particularly popular years ago, when people didn’t have access to computers and the Internet at home. Right now, such gaming lounges are mostly targeted at video game players, creating the right atmosphere for them and offering the most professional equipment. The interest in such format of a cafe increased over the last several years, but it seems that the proposition hasn’t caught up with the demand yet. As the market is not being oversaturated, you are more likely to stand out.
- Combination of services
When opening a cybercafe, you can provide more services than just selling gaming and computer time. You can also purchase several printers and provide printing services at your café. Or you can take photos of people for their documents and print them too. Purchase of scanners and printers doesn’t require significant investments, but they can become an additional income stream for your gaming lounge. Also, you may want to consider offering some snacks and beverages for people that want to spend hours at your place. This way, you will earn more and also make sure that players won’t have to go somewhere else to eat and drink.
- Fast return on investment
Another factor you should consider in your gaming lounge business model is how long it will take for it to pay off. Some businesses are better than others in this sense. When opening a gaming lounge you can expect fairly quick returns, which will be about a year on average. If you are lucky, you may even get paid-off in nine months.
- Additional perks
If you have chosen to open a gaming lounge as your business, there is a high chance that you are interested in video games. In this case, it is likely that you will get different gaming-related advantages when working with different partners and video game manufacturers. As a provider of services, you will be able to enjoy discounts and other bonuses, which is definitely a significant pro for some people.
Establishing a relationship with people in the community who also share your interests can be extremely rewarding. You will get to know a lot of people, so even if you decide to open another business in the future, you are likely to get people interested a lot faster.
- Referral programs work to your advantage
A great thing about gaming lounge business is that it can benefit from a referral program. A limited number of businesses can rely heavily on referrals, so this is a serious advantage. All you have to do is to come up with a reward system for your visitors, granting them bonuses for bringing friends or family members to your gaming lounge.
- Simple business model
If you are new to the world of business, you will be happy to hear that opening a gaming lounge doesn’t usually require you to use a complicated business model. This business is quite simple in its approach, and there are plenty of examples in this niche that you can use as guidelines. You can launch this business without prior experience and succeed, given that you are well-prepared and have a detailed business plan.
The advantages largely depend on your individual preferences and specifics of the gaming industry in your location.
Now it is time to discuss the different cons of creating this business. Some of the potential disadvantages include:
- Limited scalability
If you are interested in a gradual scaling of business, it should be noted that cybercafes are quite limited in this sense. There are only a few ways that you can go about this situation. You can offer franchises and sell them to other aspiring business owners. Or, you can establish an entire chain of cybercafes across the country and even internationally. There is a limit as to how much you can expand a single gaming establishment, so this is one of those cons to keep in mind.
- Constant control
Having a gaming lounge is one of those businesses that require you to always be in touch with your employees to oversee all work processes. There’s always a chance of force majeure situations at the venue and your equipment will require constant supervision from system administrators. You will definitely have to be particularly involved at the beginning, as you will need to see what works and what doesn’t.
However, most business owners solve the problem through software. What’s great about cybercafes and gaming lounges is that all their operations are done on computers, and computers are very easy to supervise. Management software for gaming venues automate most of the work, eliminating most of manual work, allowing owners to see most of processes online. One of such platforms is SENET – cloud-based software that was developed to help businesspeople to stay in constant control over their gaming lounges and LAN centers.
- Equipment wear-out
If we talk about a gaming lounge, the equipment is everything. It is the basis of gaming business and it needs to be kept in top condition if you want players to be interested in your lounge. Computers and consoles will be actively used in your establishment, which means that sometimes some issues will arise with connectivity or the need for repairs. You will have to replace gaming equipment every few years depending on their wear and tear, while computer periphery might need replacement every other month.
But as any other problem, wear-out of equipment has its own solution. System administrators are available for to provide regular maintenance. Moreover, the same management software that helps with supervision of day-to-day business operations also can be of great aid to check performance of the equipment. SENET, for example, has a built-in feature for CPU/GPU temperature monitoring – overheating is a proven way to notice something’s wrong with the equipment.
- Reliability of suppliers
When starting a business, you obviously want to provide high-quality equipment and services. In some cases, finding the right suppliers of equipment can be quite difficult and take a long time. There are a lot of suppliers on the market right now, but not all of them are reliable enough and provide the needed quality. This is one of those drawbacks that can discovered by many business owners and are not exclusive to gaming lounges.
Of course, disadvantages can vary depending on where you live and on your personal plans. Sometimes they can reveal themselves during the opening, but it is possible to determine them in advance – that’s why we need a business plan in the first place.
What products and services does gaming lounge business provide?
You are now aware of the potential pros and cons, you’ve come up with your own list, so it’s about time to focus on figuring out what services and products can be offered in your gaming lounge.
There can be several services that you provide at your venue, but you should think about the main one that holds everything together. For net cafes that target white collars, it can be offering the fastest internet in the area. For esports venues, it can be providing high-quality equipment for video games that most people might not have in their homes. You should come up with a unique proposition and thus center your entire marketing campaign around it.
When coming up with the main service, make sure to keep your target audience in mind. You have to satisfy their needs, provide solution to their unresolved issues, or appeal to their unfulfilled desires. It is important that there are enough people in your area who share the same need, issue, or desire. For instance, you may want to make sure that without your gaming lounge gamers in your area don’t have access to popular tournaments. This way you provide a chance to participate in various gaming competitions offering the best equipment and a suitable space for practice.
If you are serious about earning money, it is best diversify revenue streams with additional services at your cybercafe. Some of the options include the following:
- bootcamps to train gaming skills,
- separate zone for board games,
- isolated booths for streaming,
- sale of snacks and drinks,
- sale of merch for esports teams and organizations,
- rent of conference rooms or other types of private spaces for business events,
- print and scan of documents,
- photography for documents and photo print on the spot and more.
These are just some additional services that SENET users provide at their internet cafes and gaming lounges. According to their experience, additional services mostly don’t require to make major changes to your establishment, so you can easily add and test different things that your audience might like.
This is one of the most complicated steps of the business plan, as it can be difficult to imagine what prices you need to set for your services. First, to make this process a bit easier, you should definitely look at the prices of all competitors that are close to your location. Second, it is highly important that you take into account your own expenses, as they can differ significantly from your competitors depending on how much you invest in your business.
It is a good idea to provide flexible pricing for your customers, targeting different segments of your audience. A lot of gaming lounges offer different prices depending on how many hours a person spends at the venue, what day of the week it is, how often the person comes to play games. You should come up with special offers for new visitors to encourage them to visit, while implementing discounts for loyal customers for them to have the motivation to continue coming back. You can provide a unique system of rewards and bonuses and make it an indispensable part of your pricing offer.
Comparing yourself to competitors is inevitable in any business because you don’t exist in a vacuum. You will have to see what your competitors are up to, which services they provide, what their visitors say about them, and also what things they lack of. You should also see what customers like about them and what makes them stand out. This is one of the most important steps of composing a sample gaming lounge business plan, as this will allow you to form your value and unique selling proposition.
Once you take a look at your competitors and their positioning, you should focus on your own. Depending on your research, there can be several focus points of your business, such as:
- Fast and stable Internet connection.
- Pleasant environment with everything that your player may need (comfortable temperature, high-quality furniture, proper ventilation).
- High-end equipment which will include consoles, computers, screens, headsets, gaming mice, keyboards.
- Gaming licenses and licensed professional software for office works, such as Adobe and Microsoft Suite.
- Well-thought pricing system that implies discounts, special offers, and bonuses for both new and loyal customers.
- Work schedule for employees, work shifts, and compensation.
- Plans for future scaling and development.
Gaming lounge business plan introduction
The business plan template comes in different formats, but some basic principles remain regardless of how you wish to present it. Here are some important points that need to be in your business plan:
- Name of your gaming lounge
Choosing the right name for your establishment is highly important. The name you pick should help you stand out from the competitors and also be suitable for the business. You should thoroughly check to ensure that your competitors don’t use the same or similar name. Also, the name you select should be easy to write and pronounce.
- Business model
Business owners who want to express their creativity to the highest degree usually don’t choose a franchise business model. However, if you want to follow the steps of a gaming lounge that has proven results, you may want to look into purchasing a franchise. This will save you a lot of time and minimize stress, which makes it a great choice for those who are new to the industry. You should be aware of the fact that you might have limitations in decision making in a franchise, so choose your partners wisely.
- Business structure
Even though internet cafes can look very similar on the outside, there can be a great variety when it comes to inner business structures. There are many ways that your business can be registered as, so you should research this topic thoroughly. You should pay attention to understanding taxes of your country and choosing the right licenses and permits from the local authorities, so you can be sure that you don’t break the law.
- Concept and mission
The next part of your business plan should focus on describing the basic concept and what it is all about. Also, present your mission and value your business will bring to potential customers. Depending on your business goals, you can choose a mixture of concepts that will benefit your visitors. Whether it is a high-quality yet affordable Internet connection to the community, or a safe space for girls that like to play video games, or both.
As we said earlier, any business should help people and solve a problem or fulfill a need. When it comes to opening an internet café, one of the issues that you can fix is the lack of privacy and space for people that can’t focus on games at home. By going to your gaming lounge, they can play the games they like without anyone interrupting them. Or, customers can connect with the gaming community and be able to participate in gaming tournaments. Talk to people of your neighborhood to uncover the most pressing needs and list them in your business plan.
Your main services would be solutions to people’s needs that you outlined in the previous paragraph. If people asked for fast and stable Internet, only natural to connect several reliable providers at your net café and sell computer time. If the majority is interested in gaming, your main service would be in selling time at high-performance equipment, competitive atmosphere and snacks.
- Target audience
One of the most important points of a business plan is target audience analysis and identification of their needs. While anyone can visit a gaming lounge at one point or another, you should still understand who your core audience is. Most of the time, young males, particularly students, would make the most loyal customers of gaming venues. Adjust your selling proposition around this core. For instance, if most of the people who are interested in a new gaming lounge in your area are adults, you might consider selling alcohol. In case your lounge will be opened in the school area, alcoholic beverages are prohibited and can’t be included into business plan.
A lot of entrepreneurs who open gaming lounges happen to be gaming enthusiasts or are knowledgeable in the sphere of computer networks and technology. Understanding what drives you in your pursuit will help you stick to your business, develop in the right direction, and determine future goals for scaling correctly.
Gaming lounge setup requirements
Business plan should include a list of exact tools that you will need for work, their cost and suppliers. The shortest list would include the following:
- Licenses and legal permits for gaming venues from local authorities.
- Location and interior design.
- HVAC systems.
- Internet providers and network equipment.
- Management software for gaming venues.
- Gaming furniture.
- Gaming setups.
- Software licenses.
- Employment of staff.
- Kitchen, bar equipment and other things necessary to provide paid service.
If you choose to purchase a gaming lounge franchise, franchisors will help to sort out most of the abovementioned things. For example, all franchisees usually must follow the same interior design standards and purchase PC hardware with specific tech specs. You should study thoroughly all conditions from the franchisor, so you are aware of things you decide on your own and things that should not be changed at the venue.
Marketing analysis and strategy
No business plan can be complete without a proper marketing analysis and an appropriate strategy. It is impossible to have a successful business without understanding of the market, as you cannot rely on sheer luck. Market analysis helps minimize risks and losses, so you can feel more confident about the future.
The importance of market analysis cannot be underestimated. This part of the business plan is absolutely crucial and largely determines your success in the industry.
Spend plenty of time researching the market related to gaming lounge business, take a look at the trends and how they change over time. While you can do this on your own to an extent, it is a good idea to turn to professional marketers that can help you conduct this analysis. A large percentage of business owners resort to services of analytical companies at this stage to get accurate and reliable information.
If you decide to conduct research on your own, one of the techniques that you can use is called PESTLE analysis. This type of analysis focuses on political, economic, sociological, technological, legal, and environmental aspects of research. For example, is economic situation in the region favorable when it comes to opening a gaming lounge? As for the social factor — are there enough people in your area that will be interested in this business? If we take a technological aspect, the question may be — how many reliable Internet providers do you have in the area?
Many other questions arise when you start answering the most basic ones. The situation in the country can change quite quickly, so you should always use relevant information. This is especially relevant when we think about the politics and economy of the country, which can significantly influence the prospects of your business.
Market trends & needs
When it comes to market trends, it is obvious that the main target audience of gaming lounges is people who have plenty of time on their hands. Students and schoolchildren are the most promising groups that might be interested in gaming lounges, so you should pay attention to pop-culture and gaming culture trends that the kids are into. Do students prefer playing video games or watching short videos online? The information you get will help you decide whether opening a gaming lounge in a certain area is a good idea.
One of the major trends in the gaming lounge business is the need to offer services that promote socialization and relaxation. For instance, facilities often offer board games, arcade machines, a bar with a variety of beverages (both with and without alcohol), different snacks that can be easily consumed in a gaming lounge without a kitchen. If you want to stand out from competitors, you should definitely be creative and offer services that create a unique atmosphere.
When preparing information on the needs of your customers and any trends, you might use various statistical data available online. There are plenty of sites and journals with information on the state of the gaming industry, how it is affected by the economic situation, and how successful it is. Your business plan should always rely on accurate information and not on rumors. Once you have decided to conduct your research, you should also pay attention to different spheres that are related to gaming. This may include esports, online streaming, computing hardware production, or entertainment industry.
In the business plan, there should be a description of your marketing strategies. You should put a lot of effort into promotion of your gaming lounge, especially in the beginning, when no one knows what you have to offer. It can be quite a challenging process, but there are some basic principles that you may implement to get your name out there. Here are some steps that you may want to consider:
- An opening party where people from the community can have fun, learn about your business, and try your services for free or for a big discount.
- Depending on how much money you are ready to invest in promotion, you can advertise your establishment on social media, search engines, or resort to outdoor advertisement.
- It is highly important to promote your gaming lounge on social media and you should focus on all of the different platforms at once, instead of choosing just one.
- While this method may seem somewhat outdated, you should print some flyers and have someone pass them out in public places, especially close to schools and universities. You should use your research of the target audience and promote your gaming lounge in their favorite public places.
- Encourage people to subscribe to your newsletter prior to opening. Remember to provide value, such as discounts, to everyone who subscribes.
- It’d be better to develop a rewards system, so that people feel motivated to come back to your gaming lounge after their first visit. Referral programs where customers get bonuses for bringing their friends is also a great way of promoting your business.
When creating any business strategy, the key is to focus on your target audience. You should remember that gaming lounges are most often visited by young people who are the most active users of social media. While all the other methods, such as passing out flyers are also necessary, you shouldn’t underestimate the power of social media and the Internet when attracting your visitors. This is especially relevant considering the nature of the business. Gamers often have advanced computer skills and spend a lot of time online.
Anyone who is serious about opening a gaming lounge should start by developing a detailed business plan. A high-quality business plan should answer as many questions as possible about the details of operation and the future developments to increase the chances of success. Also, business plan can be used to persuade potential investors who may be interested in chipping in but need to see more specifics.
A business plan shouldn’t contain any imaginary content and be used only for persuasion. It is important that you identify weak points in the process, so you are fully prepared to deal with any issue. Use relevant and updated information when compiling a business plan, as the economic, social, and political situation in the country can seriously affect your business. You should describe as many aspects of your business as possible and make some corrections along the way. Overall, having a great plan will significantly help you when creating a business, so it’s something you should spend a lot of time focusing on.