How to Start A Laser Tag Business
So you’re thinking about starting a laser tag business?! Congratulations! You’re entering a dynamic and rewarding industry that is both exceptionally profitable (when it’s done right) and fulfilling for owners and operators. Does it even count as work if you’re having fun each day!
Of course starting any business from scratch, particularly a laser tag center, can seem like a daunting prospect.
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Who is this business right for?
What’s the Target Market
What are the costs?
What are the ongoing expenses for a Laser tag business?
Is laser tag profitable?
What are the space requirements for a laser tag businesses arena?
Create a business plan, and research the market
Location is King
Selecting your Laser Tag Partner and equipment
Designing your Laser Tag Arena
Supporting other attractions
Operational permits, and licenses
Secure financing and get insurance
Get the word out
Operating a Laser Tag Centre
Start your laser tag business
Any insider tips for jump-starting a laser tag business
Who is this business right for?
The good news is you don’t need a college degree or business experience to become successful with laser tag. You don’t even have to be an avid laser tag player (but it certainly doesn’t hurt!), but you do need to have an entrepreneurial spirit and a love of having fun!
Laser tag is right for those who are intrigued by technology, enjoy entertaining, and enjoy interacting with a variety of different people. If you enjoy a fun, enthusiastic work environment, a laser tag operation might be perfect for you. For many, the idea of owning and operating a laser tag business has been a long-standing dream. With the proper preparation, that dream can become a profitable reality.
Our operators come from all walks of life; from former executives to people just out of high school, retired couples and newlyweds. Anyone who has passion and drives to succeed can find that success with Laser Tag.
What’s the Target Market
When considering activities for children, families, and adventurous adults, a laser tag business can be a great fit for all types of clients. Be it birthday party celebrations, team-building exercises, or indoor activities for children when it’s raining outside, a laser tag facility can offer excitement and challenges.
To say this another way, individuals from every age group enjoy laser tag. Your core demographic will depend on your market and your marketing. In most markets, younger players will be your biggest source of income. But, with great arena design and a sound marketing strategy, your business will also attract young adults and older adults too. Adult players relish the chance to challenge co-workers, enjoy an evening with their friends, or compete against others who like to take the game a little more seriously.
The greatest demand comes from children aged 7 to 14, typically for birthday parties, and younger adults aged 18 to 25. These younger adults often spend the most money. On average, male players make up just over two-thirds of the demand. However, this does vary a lot by age, with an equal split for guests under the age of 18!
What sort of costs are involved in starting a Laser Tag Business?
We won’t sugar coat it; there are significant costs to starting a Laser Tag Business or any entertainment business. To start a centre from the ground up, you will need a budget of at least 100,000 USD. The largest investments for a start-up centre include:
- Lease or purchase of a building of at least 600m2 (5300 Square feet). In most cases, facilities are a lot larger as they try to have at least two major attractions! Learn why that’s a good idea here
- Design and construction of the arena and other spaces needed for operating a successful centre.
- Laser Tag Equipment
- Other Attractions
- Insurances, licenses and permits
Then once you’ve got the build done initially, you need funds aside to cover:
- Staff wages
- Marketing and advertising
What are the ongoing expenses for a Laser tag business?
The two main ongoing operating expenses for any entertainment business are employee wages and rent (or building loan repayments). Together, these account for about 45-50% of your gross takings. Other key expenses include electricity, marketing, insurance and cost of goods sold (i.e. drinks, candy, apparel).
Is a Laser Tag business profitable?
Yes, indeed! An efficient laser tag site will achieve 15-40% profit after management wages but before tax, interest and depreciation.
It’s not only profitable but extremely lucrative if managed effectively. The average laser tag centre puts through approximately 1,500 player games per week, with many sites easily pushing beyond 3000. Depending on your region, you will be able to charge between $7 per game (in regional areas) and $11 per game (in metropolitan areas) – now you do the math (Or use this handy calculator). Many of our operators have reported an ROI of fewer than 12 months!
The key to making a laser tag business profitable is to run at capacity as often as possible. The more hours per week you run at capacity, the more money you make. And, the most successful way to run at capacity is to drive repeat play through marketing. Use a membership program to bring players back time and again, staff efficiencies to get games through quickly, and reliable equipment to operate consistently at peak.
- How-to calculate potential revenue
- Realistic expectations of capacity
Another great way to improve the profit of your centre is to include multiple attractions under one roof. This allows you to lower the staffing costs of each attraction by sharing fixed and operational costs and increase your facilities pulling power by having more things for your guests to enjoy!
What are the space requirements for a laser tag businesses arena?
This is where the ultimate vision for your facility gains traction or falls on its face! Having a well-designed, playable arena is absolutely crucial to the success of your laser tag business.
We have very successful laser tag centres operating arenas as small as 100m2 (1050 square feet) and as large as 1100m2 (11800 square feet), while the average size is between 250-400m2 (2700-4300 square feet). A good rule of thumb is to allow 10 to 15 square meters (about 107 to 161 square feet) per player. This will provide comfortable playing space for your customers.
The shape of your arena can vary depending on your building and layout. Some facilities design symmetrical arenas, split and mirrored down the middle. This can be great for team or competition games with players requiring strategy and planning to succeed. Other facilities prefer less conventional designs, allowing for more random and sporadic gameplay where players need craftiness and cunning to prevail. Arena designs should always incorporate unique elements and a mix of obstacles to hide behind.
We also recommend creating a two-level laser tag arena, if possible. Today, most arenas are two-levels or incorporate raised areas, which offers more flexibility and options for creating an exciting and varied player experience. From our research, we’ve seen Multi-level arenas outlast and outperform single-level arenas. However, don’t let that dishearten you if you can’t do a second level. We’ve also worked with arenas of all sizes and levels, and there are ways to make any arena just as exciting. Work with your arena builder and laser tag equipment supplier to determine the best options for your business.
Create a business plan, and research the market
According to IBISWorld, Pre-COVID the laser tag market in the US alone is $640.5 million in 2019. Understandably with the turmoil in the market since 2020 the overall market has had a downturn. However, after being holed up for many months consumers are itching to get back out to enjoy themselves, particularly in the entertainment sector, and parents are desperate to get their kids out of the house. Adults too are looking for ways to unwind and have some much-needed fun. Entertainment attractions/centres are the answer to both, and the results are proving it
IBISWORLD:
What is the biggest opportunity for growth in the Laser Tag Arenas industry in the US?
As the availability of leisure time among the general public increases, demand for recreational activities will increase, boosting traffic for industry operators. Therefore, an increase in time spent on leisure and sports raises industry demand. Time spent on leisure and sports is expected to increase in 2020, representing a potential opportunity for the industry
It’s also no secret that some entertainment businesses have closed indefinitely or permanently due to the pandemic. While unfortunate, this has also opened up many opportunities for businesses to jump in and take advantage of the unleashed consumer demand.
What’s more, people are increasingly looking for, and willing to pay for, experiences rather than products. Get customers out of their homes and into your centre with an amazing adventure they can’t get anywhere else. Games with Zone are vibrant and exhilarating, a thrilling experience for all ages. No other Laser tag experience provides the quality, features and excitement that Zone brings to the Laser Tag Arena.
There are likely variations in your local market, and that’s really where you should be doing your market research. Check out similar laser tag and family entertainment centres in your area to understand their pricing and membership models, location and foot traffic, and marketing efforts. Make a note of what they do well and what they do poorly. Consider what you will offer that will be different.
Also, consider what type of laser tag business you want to run. Will you have a laser tag arena with laser tag as the primary attraction or a family entertainment centre with multiple activities like trampolines, bowling and go-karts? Spreading your centre out into multiple attractions will increase the time customers spend in your building, as well as how far they are willing to travel.
Once you’ve done your initial research and ideally talked to experts both in the industry and in your local area, you should have a good idea of what you want and what you don’t. Once you know how to make your business stand out, it’s a good idea to do a formal business plan. Inc has some great tips on what you should consider.
Location is King
The first and most important decision facing a future laser tag entrepreneur is location. Even though every city and country has its own unique characteristics, there are several common considerations that can point you in the direction of success.
We can break this down into four main sections: population, locality, area, and type of building you should look for.
The population base surrounding your Laser Tag Facility or Entertainment centre can have a huge influence on your success, especially when you consider the existing competition close by. The rule of thumb in the Laser Tag Industry is that you want to have at least 80,000 guests within a 15-25km radius from your centre, or your business will struggle.
Laser Tag centres can be located in various places like malls, industrial areas, existing entertainment precincts, and tourist hotspots. Each location has pros and cons, with lots of variability depending on the country, culture, and population density.
Rent; securing a reasonable rent is an essential part of the success equation, and malls and CBD areas demand high rents, compared to industrial and residential areas Rents just one factor, though, to learn more about the pros and cons of areas related to rent, exposure, foot traffic and more read on
Selecting your Laser Tag Partner and equipment
Selecting which commercial laser tag equipment to use at your family entertainment centre is a big decision. Naturally, you want to choose the best system for you, but don’t want to spend an arm and a leg. This is true for all laser tag sites, but especially for those just starting–there are significant costs to opening a laser tag business, and equipment is just one of the many line items.
But ask any established laser tag business operator, and they’ll say your commercial laser tag system is one of, if not the most important item. Sure, a low-end system that simply allows players to zap each other may save you on price, but it will cost you in the long run on maintenance and lack of repeat play features.
If you’re using Zone as a partner, we can get you the best of both worlds with our scaling systems, along with financing options that mean you don’t need to break the bank starting out.
Designing your Laser Tag Arena
Designing your arena is right up there with selecting the best laser tag equipment for your business. A successful laser tag attraction is made or broken by your arena design. Combining strategic arena design with your laser tag equipment and arena technology (bases, targets, mines, and designs) builds an attraction synergy that maximizes your customer’s experiences and helps to diversify and expand your market opportunities.
With a completed build-out and a synergy between your laser tag arena and your laser tag equipment, you can offer a wide variety of standard and unique laser tag and arena games that appeal to a broad range of players and demographics.
“It doesn’t stop there, though. To make a successful centre, the whole building must be aligned, themed and well laid out to optimize the facility. The layout of your building, flow-through common areas, and arena devices and elements are pivotal to creating an enjoyable, entertaining and immersive experience for your players. As well as allow for the ability to move large groups of people in and out of your attractions.”
The secret to designing a successful arena is by involving people who are passionate about Laser Tag.
This can be achieved in two ways. Firstly, involve a group of expert Laser Tag players to work with your architects and builders and advise on wall positions, base layouts, etc. Ideally, these players should be familiar with the chosen equipment as each product varies on what design works best.
Alternatively, you can seek advice from the industry itself. Arena building companies generally include free design services with the purchase of a turn-key arena, and Zone can introduce you to a range of companies at different price points. Or, even better, Zone offers a complimentary arena consultation and design service with any Zone Laser Tag System purchase. That being said, it never hurts to do your own research and get to know who’s out there or talk to multiple people to make your own informed decisions.
Supporting other attractions
The size of your catchment area, the area around your centre where most of your customers come from, actually depends significantly on how long customers spend in your centre. Research shows that customers will travel on average 30-40 minutes for an experience that will last for two to three hours. The shorter the experience lasts, the less distance customers will travel.
It’s simple. If you increase the amount of time your customers are entertained in your centre, your catchment area will increase. By doubling the distance customers are willing to travel to your centre, you quadruple your catchment area and customer base.
That’s why over the last decade, many laser tag sites have combined with other entertainment facilities to create a full family entertainment centre with a mix of attractions and draw cards. The average Laser Tag experience will last 8-15 minutes, so your catchment area extends about 10-15 minutes drive away. To increase your catchment area, you can consider other entertainment attractions, such as challenge rooms, bowling or mini-golf, that last around 30-40 minutes.
Here are 3 Reasons why having a multiplex helps:
- Cost advantage, each attraction utilizes shared facilities like bathrooms, reception, party rooms, and staff.
- Customers will be entertained for longer, which means they will travel greater distances.
- People are more likely to go to a multi-entertainment centre as there is more to do and will travel past smaller centres to get there.
The downside? Setting up a full family entertainment site is not for the fainthearted! The costs are much higher, and the building must be larger. Regulations will be more intense, and the time commitment much greater as well. But with risk comes reward!
Operational permits, and licenses
Obtaining the right licenses and permits for your business and your locality is essential. Be sure to check with your city, county, state, country to determine what documents you need to establish and run your business.
If you’ve got food offerings, generally, these regulations are even more strict. However, offering food and beverage is a great upsell for your facility, so it shouldn’t be discounted as an offering. In some areas, you will also need to get ‘working with children or ‘police checks’ for your crew members to serve your guests.
Failure to make sure you have the right operational permits and licenses will result in hefty fines or even shut down your business. So make sure you consult with your local bodies.
Secure financing and get insurance
Now that you know what to budget for, you’re ready to get your laser tag business funding. Will you be funding your laser tag business with your own money, or will you need investors or financing to get you off the ground? If you’d prefer to secure finance independently, your laser tag equipment sales representative should be able to point you in the right direction.
Another source of investment capital is to crowdsource on sites like Kickstarter or Indiegogo. While your chances of getting your entire business funded by customers are rare, running a campaign can help you gauge demand in your market.
Zone (and some other suppliers) also offer flexible payment options designed to lower start-up costs and assist cash flow. Be sure to discuss this option with each of your suppliers and vendors.
The most common way of getting financing is through lenders like SLS Lending and Marlin Capital, who are very knowledgeable in the industry. In many cases, they will be looking at feasibility studies and market research to determine the loan amount. For financing in APAC, and Europe we have alternative financing options available. Contact your local office for details.
To operate safely and legally, you’ll need to obtain business insurance and public liability insurance. This will protect your laser tag company’s financial wellbeing in the case of a covered loss. Also, consider if you want–or in some regions, need–to carry workers compensation insurance to cover your employees, alongside HR insurance, if you’re going to have a large team.
Get the word out
People won’t come to your centre if they don’t know it exists. That’s why marketing and advertising are imperative for reaching your target market and driving recurring revenue.
Getting in early is also key to making sure you start with the best chance of success. Create social media accounts and post photos of the building as it progresses, getting people excited before you even open. As you get closer to opening, create an event, invite influencers and local media for extra coverage.
Don’t stop advertising once you’ve opened either. Run ads in your local newspaper or radio station. Partner with nearby businesses to cross-promote and/or send out direct mailers and email newsletters. Post fliers around town, host parties and events reach out to corporate event planners, schools, and churches in your area. Offer local groups player of the day vouchers and reasons to attend your facility. Just to suggest a few.
Your digital landscape, website, maps etc., is key to getting people to know where you are and how to get to you. Create and maintain listings on Google Maps, Tripadvisor, and other local directories. There are near-endless ways to get the word out about your new business, and your imagination is really the only limitation! Zone provides a large range of marketing resources for your business, along with web services to get you on the right track from the get-go.
Operating a Laser Tag Centre
Now that your centre is coming together, you want to account for your business’s daily operations. To keep up with the demand from your customers, here are some of the core functions of running your business:
- Marketing and sales to attract guests and book parties and events.
- Customer service to ensure your guests have the best possible experience.
- Administrative functions, including paying rent, ordering supplies, licenses, permits, etc.
- Development; centres aren’t set and forget, and you need to keep an eye on what needs changing and what new technologies have entered the market.
- Finance and human resources to hire, train, and manage staff.
- Information technology handles everything from websites to phone systems.
- Partnerships; developing relationships with local schools, businesses, and more
There are numerous resources and software in the industry to handle every aspect of your core functions, including online party reservations, digital waivers, and debit card systems.
Technology enables you to reduce customer friction at every touchpoint.
By putting yourself in your customers’ shoes, you’ll be able to map every interaction to create and document internal processes for your staff. To become a data-driven fun centre, you’ll want to establish Key Performance Indicators (KPI’s) and metrics to track opportunities to improve your business.
Start your laser tag business
Now that you have answers to the most common questions about starting a laser tag business and a checklist of the key steps connect with us for a free consultation. Our experienced and knowledgeable consultants, many of whom run their own facilities, will help answer any other questions you have and provide continued guidance on turning your laser tag dream into a reality!
As you prepare for your grand opening, it’s always a good idea to have a soft launch to iron out all the kinks before opening up the floodgates and remember to always learn from mistakes and continuously improve. That’s what the best laser tag and entertainment centres do.
Any insider tips for jump-starting a laser tag business?
We’ve got more advice than we could ever share. But, if we had to pick a ‘top five’, it would be these:
- Never underestimate the importance of your equipment – players do notice the difference in ‘feel’ and experience.
- Before investing in equipment, research the manufacturer – you want high-quality kit from a high-quality provider.
- The overall look and design of your facility, particularly the arena itself, is critical – let us help you design and build it.
- Design your arena to fit your available space – assume you need 16 square metres per player (hint: go multi-level).
- Satisfy and surprise your customers – they don’t always want to play the same game again and again. Spice it up by altering some game options or occasionally playing one of the more advanced game choices.
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