Starting a family entertainment center can be a daunting task. There are several facts and figures you have to lock in, and a couple of studies you have to secure to make the business venture a possibility – or prove otherwise.
A feasibility study is the starting point of the development process of your business venture. It also acts as an evaluation for the potential markets, financial performance, and development cost.
Aside from being the basis that proves your dream can be a reality, feasibility studies are necessary to identify whether your idea is in the right place and at the right time. Will the business be appropriate vis-à-vis the demographics in your target area? Is it profitable and fundable?
Like any other studies and analyses required to proceed, conducting a feasibility study incurs costs such as a consultant’s fee (when tapping a professional to do it for you like the best practice), inspections, and financial projections. The price range can go from $5,000 to $15,000 based on the complexity level of the business size, type, and location.
To get started, here are a couple of things you need to tick off your list:
1. Site and area evaluation
This is imperative to determine the effect on foot traffic and usage in your FEC. It includes a discussion of the market proximity, access routes and traffic patterns, and potential competitive facilities.
2. FEC concept
The study should include a thorough description of the FEC’s concept in relation to the identified industry trends in the area. This part will cover the project design, theme, location size, and blueprint, among others.
3. Market analysis
Based on the distance from the site you have in mind, the market areas should be defined in this section, including the demographic characteristics, population growth, age distribution, and income distribution. For a more in-depth discussion, you can also include the tourist market evaluation that covers the current size, historical growth, and trends.
4. Direct and indirect competition
What are the threats surrounding your prospective location? Examining these will give more insight into zoning, financial performance, traffic, and other factors necessary to competitively operate and reach your target markets.
By providing a potential annual usage for your proposed family entertainment business ideas, it is good to have a projection of the first five years of operations based on planned components, market size and characteristics, competitors’ market performance, and location.
6. Concept planning and development
There are certain parameters that vary from one family entertainment concept to another. Physical planning recommendations from professionals are needed to reach the target market’s expectations.
7. Financial analysis
This includes projected revenue streams (entrance fees, food, and beverage, etc.), operating expenses, ROI for investors (if applicable), projected operating profit, and development costs.
For a quick guide, here’s a list of market feasibility study contents.
After the feasibility study, you are almost ready to add it to your FEC business plan, which you will be presenting to potential investors and partners for capital and funding.
>> Click on the link to check out our Guide "How to Start a Family Entertainment Center Business":.