This article discusses ways to start your own escape room business from scratch.
If the idea of starting a game business sounds interesting to you, you may have thought or brainstormed about the perfect business opportunity to launch.
An escape room is one idea you should also consider.
Every business idea needs to be well thought out and systematically implemented. Here, we’ve listed several steps on how best to bring this business idea to fruition.
So, are you ready? Let’s go!
How To Start An Escape Room Business
There are several steps involved when it comes to the successful launching of an escape room business. These include planning, having a legal entity, registering for taxes as well as opening a business account.
Also, you’ll need to set up business accounting and obtain licenses and permits.
Business insurance is also essential. The same applies to branding, building a business website, and also having a dedicated phone system.
Let’s take a look at each step mentioned for more clarity.
i. Planning
Planning entails a lot of things. Basically, it covers all areas of operation.
In planning your escape room business, you’ll need to factor in the costs as well as ongoing expenses. Also, you want to identify your target market, outline ways through which you’ll be making money, and also set pricing.
Through planning, you’re also able to set a realistic earning potential. Of course, this largely depends on available information and industry trends. Now, there’s no definite cap on how profitable an escape room business can be.
As such, you’ll need to push the frontiers by long for ways to make your business more profitable.
The name you choose for your escape room business matters. Your personal name won’t be suitable for use especially when you operate a sole proprietorship.
You’ll have to take all the time necessary to come up with a befitting name.
ii. Having a Legal Entity
What legal entity do you wish to adopt for your escape room business? The most common include the sole proprietorships, partnerships, limited liability companies (LLC), and the corporation.
Each type offers certain benefits. You’ll need to go for one that aligns with your needs.
For example, a corporation or an LLC will offer you protection from personal liability when the business is sued. For sole proprietorships, you get the ease of launching your operations, plus complete control of the business.
On the downside, you’re personally liable for when the business is sued.
If you’re confused about what to settle for, you might want to discuss with a legal expert. In the end, you should have a better idea of what legal entity best serves your escape room business.
One thing you should know is that a business can switch from one legal entity to another when the need arises.
This makes things easier as you get to adjust your escape room business’ operations to adapt to current realities.
iii. Registering for Taxes
Taxation is a crucial part of doing business that every entrepreneur needs to know about. There are state and federal taxes to apply for. Sometimes, local taxes may be applicable.
One of those taxes you may have to apply for is the Employer Identification Number (EIN).
This is issued by the Internal Revenue Service (IRS) to all businesses. Luckily this number isn’t difficult to obtain. You only need to visit the EIN website for a step-by-step guide on how to proceed.
Your business structure determines how your escape room business will be taxed.
Asides from the IRS tax requirements, there may be state taxes you’ll need to register for. Find out what applies to your area. With this process completed, you’ll need to move to the next step.
iv. Opening a Business Account
The best way to run an escape room business is to have a dedicated account created for it. In other words, your personal finances need to be separated from that of your escape room business.
This allows for greater accountability.
In addition to a business account, consider having a credit card for your business. The need for separation is more evident in the event your business is sued.
Legal proceedings against your business will make you personally liable when a common account is used for both personal and business transactions.
Separation of personal assets from those of your business protects your assets in addition to making tax filing and accounting much easier.
With your escape room business credit card, your expenses get separated from personal expenses. What more? You get to build your business’ credit rating history.
v. Setting Up Business Accounting
This might be confused with opening a business account for your business venture but it isn’t. Business accounting simply requires keeping a record of all expenses as well as income sources. Why is that important?
It’s important because it helps with interpreting the financial performance of your business.
Your annual tax filing doesn’t have to be complicated with a well-laid out business accounting.
To make this possible, detailed and accurate records must be kept.
vi. Franchising Vs Starting from Scratch
There has been a major transformation in the way business is done.
Although the basics remain the same, small-scale investors get greater opportunities to float their escape room businesses. This is clearly seen in franchising.
Here, you’re franchising an existing escape room brand.
You become its partner by operating under its brand name in addition to the use of its business systems. On the other hand, starting from scratch is another option you have.
Although this is quite daunting, it’s worth the stress when the business takes off successfully.
vii. Building a Business Website
The best way to increase your visibility is by having a business website. This is crucial due to the importance it brings to your business operations. Any business without a website isn’t taken seriously.
Your clients should be able to visit your website to know about your operations.
Plus, they should be able to contact your business for further inquiries. Your website tells a lot about your escape room business.
These are some of the major actions that need to be taken to launch your escape room business. They enhance your chances of success while guaranteeing sustainability.