07/13/2019
Rough Draft for Pickles Arcade business plan:
Business Plan for Pickles Arcade
Delta, CO 81641-1403
Phone: (970)985-2928
Fax: (732)753-4337
http://www.picklesarcade.com
http://www.portavend.com
[email protected]
Executive Summary
General Company Description
PortAvend Arcade Repair is in the business of repairing, maintain and restore arcade systems for home and commercial use. We also maintain a showroom (Pickles Arcade) where the public can enjoy the use of the machines. Most of our business will come from the Internet, and machines will be shipped to our repair facility for service.
Pickles Arcade
Why in this day and age would an arcade make any money, with games available for the home and available for their phones or computers?
Pickles arcade provides one enhancement that you can not get at home or on their phones or computers, instant gratification.
When you play at Pickles Arcade, you earn prizes. The more you earn, the larger the prize.
Unlike games at home, skill can earn you larger bonuses, which in turn allows the player a more gratifying entertainment experience.
Company Goals and Objectives:
Mission Statement: Many times in ones life, the chance to escape from the day to day grind does not come as often as one would like it. Allowing those who seek entertainment by providing such a venue for low cost family entertainment in a friendly, safe, clean environment.
Business Philosophy: Restore the fun from the Past.
To whom will you market your products?
General public looking for cheap entertainment.
Commercial arcade owners and homeowners with rec/game rooms
Describe your industry.
The larger commercial arcade machines, which typically yield the most profit, have many workable parts. It is not uncommon for these machines to have occasional breakdowns--another problem with owning a arcade business. These machines have to be shipped for repairs most of the times. Whether it the electronic or mechanical, most owners do their own repairs. But, when they can't fix it themselves, that is where PortAvend Arcade Repair comes into play.
Legal form of ownership: Sole proprietor, AtlanTech Vision/dba/ Pickles Arcade & PortAvend Arcade Repair
Products and Services
Pickles Arcade will provide the residents and guests of Delta Colorado a location to have fun playing arcade games and games of skill.
PortAvend Arcade Repair will also provide a location to bring electronic devices to be repaired.
PortAvend Arcade Repair also provides a location to purchase home video game accessories and media.
What factors will give you competitive advantages?
Pickles Arcade will be the only full time amusement facility located in Delta Colorado.
PortAvend Arcade Repair will be the only full time repair facility located in Delta, Colorado.
Examples include level of quality or unique or proprietary features.
PortAvend Arcade Repair will be managed by Tony Valdez, who has over 30 years in electronic and mechanical repair. A 10 year Navy veteran, he has been trained in eletronic and mechnical repair. When others fail to repair, Tony has fixed the problem.
What are the pricing, fee, or leasing structures of your products or services?
Pickles Arcade
By offering game play at 25¢ per play, it will be the cheapest form of entertainment, bringing back the memories of the arcades from the 80's.
Collecting tickets for game play, to redeem for prizes, will further evoke those who love to play a incentive to continue to play in order to obtain larger prizes.
Prizes will include:
Home video game systems and media
Electronic devices such as cameras and music players
Stuffed animals
Small toys and novelties
These prizes are paid for by taking part of the sale price of the tokens and creating a prize fund.
PortAvend Arcade Repair
Our current hourly fee is $45.00 an hour, with an average of 20 hours per job.
Electronic device repair (non arcade systems) will be $40.00 with an average of 2 hours per job.
There is not currently a location in Meeker Colorado which provides the facilities to repair electronic devices.
Available repair manuals and schematics for almost all arcade and electronic devices are available online.
Marketing Plan
The Market
Industry report:
This industry includes establishments primarily engaged in operating coin-operated amusement devices, either in their own or in other places of business. Such amusement devices include jukeboxes, pinball machines, mechanical games, electronic games, pool tables, shuffle alleys, electronic darts, video games, kiddie rides, prize dispensing machines, and slot machines. Amusement (including video game) arcades and parlors are also included in this industry.
Coin-operated amusement devices were the staple of video arcades of the 1970s and 1980s. Large rooms, found in malls, restaurants, resorts, shopping strips, and college campuses, among many other places, were gathering places for youth, who fed quarters into an array of video games. However, the growing popularity and advancing technology of home gaming systems, beginning with the NES and advancing in the early years of the first decade of the 2000s to Playstation 3, Xbox 360, and Nintendo Wii, led to the nearly complete demise of the large youth-targeted arcades. In their place came family entertainment centers (FECs), casual dining facilities with large game rooms geared to a range of ages, including younger and older children and adults, and gambling operations, including casinos and horse racing tracks in states that allow them to have slot machines as a means for competing with casinos.
The modern-day FEC began to emerge in the 1980s and differed from past entertainment areas that featured coin-operated amusement arcades, which were commonly found in theme and amusement parks or in vacation or downtown areas and relied on tourism. The modern FEC is usually a large indoor facility set in a residential area, offering multiple attractions including play areas, miniature golf, bowling, go-karts, batting cages, laser tag, and sections with coin- or token-operated games. The development in the 1970s of soft, contained play equipment, safe for children to bump against, helped spawn the modern FEC, allowing developers to combine large and adventurous play and gaming areas. FECs can range in size from 15,000 to 200,000 square feet.
Many FECs depend on coin- or token-operated games for a portion of their revenues. Per capita expenditures were less than $15 per visit, so FECs relied on repeat visits and a steady flow of new customers. Although not always the main drawing point of the FEC, token-oriented games accounted for approximately 25 percent of the income of these establishments.
Coin- and token-operated amusements were also significant at small venues, like Chuck E. Cheese, which operated a chain of 530 pizza restaurant-game rooms in 2009, where games and merchandise accounted for nearly 50 percent of revenues. Chuck E. Cheese's began in San Jose, California, in 1977, with the concept of merging two favorites of children, coin-operated rides and pizza. After being purchased in 1984 and merged with Showbiz Pizza Place, Chuck E. Cheese's proved a stronger brand name and all Showbiz establishments were changed to Chuck E. Cheese's by 1993. Since 1997 Chuck E. Cheese's have operated under the corporate name CEC Entertainment, Inc., of Irving, Texas. CEC posted revenue of $814.5 million in 2008.
As of January 1, 2012, Chuck E. Cheese's operated 556 stores employing 17,300 workers, including another 16,900 operating company-owned stores. The majority of Chuck E. Cheese's were located in California with 80 operations and Texas with 60 operations. The company also had 14 company-owned stores in Canada and 13 franchised operations in Chili, Guam, Guatemala, Puerto Rico, Saudi Arabia, and the United Arab Emirates. The company reported revenues totaling $818.3 million in 2009 and $817.2 million in 2010, before rising slightly to $821.1 million in 2011. The company had net income of $61.1 million in 2009 and $54.9 million in 2011. Chuck E. Cheese's was actively seeking additional franchise partners in Latin America, Asia, and the Middle East.
More adult versions of entertainment centers feature casual dining, a full bar service, and cavernous game rooms. Among the most popular are Dave and Buster's, based in Dallas, Texas, which has about 50 locations in 20 states with $536.3 million in revenue in 2008. Dave and Buster's "coin-operated" games have gone high-tech. Patrons purchase a card on which they load points. Each game costs a certain amount of points, which is removed from the patron's card when it is slid through the vending device. ESPN Zone, started by the cable sports network, has eight locations, each of which offer food and drinks, more than 150 monitors showing sporting events and feeds from the various ESPN channels, and more than 10,000 square feet of interactive sports games. Dave & Buster's realized revenues of $541.5 million in 2011, up 3.8 percent from $521.5 million in 2010. Amusement and other revenues totaled nearly $269 million, responsible for 49.7 percent of total revenues during 2011. As of January 29, 2012, the company operated 58 company-owned stores in the United States.
Concurrent with FECs and entertainment centers geared toward adults both becoming well established during the final quarter of the twentieth century, the proliferation of legalized gambling produced dramatic growth for some participants in another segment of the coin-operated amusements industry. Slot machines have become so popular that they provide 70 to 75 percent of casino revenues. The American Gaming Association (AGA) refers to revenue as gross gambling revenue (GGR), the amount wagered minus the winnings returned to players. GGR, according to the AGA, "is the figure used to determine what a casino, racetrack, lottery or other gaming operation earns before taxes, salaries and other expenses are paid." The GGR increased annually since the mid-1990s, reaching $36.22 billion in 2008 before falling to $34.28 billion in 2009 and rising slightly to $34.60 billion in 2010. Five casino markets had gross revenue surpassing $1 billion in 2008: the Las Vegas Strip with $6.12 billion; Atlantic City, $5.55 billion; Chicagoland, Indiana/Illinois, $2.25 billion; Connecticut, $1.57 billion; and Detroit, $1.36 billion. The six casino markets that had gross revenue surpassing $1 billion in 2010 were the Las Vegas Strip with $5.77 billion; Atlantic City, $3.57 billion; Chicagoland, Indiana/Illinois, $2.05 billion; Connecticut, $1.38 billion; Detroit, $1.37 billion; and St. Louis, Missouri/Illinois, $1.08 billion.
Another popular coin-operated gambling device is the video lottery terminal (VLT). VLTs are slot machines that display video games, such as video poker and bingo, for low-stakes gambling. In states where these machines are operated, they are part of the state lottery system. The VLT terminals are the same as the video poker machines in Las Vegas, Nevada, except for the payment devices. Money is fed into the machine, and winnings and losses are electronically calculated and printed out for the player. State lottery revenues have slacked off, and the video lottery is a means for states to increase revenues. Video lottery terminal machines offer the gambler the opportunity to play video poker, blackjack, keno, or bingo for a nickel to $2.50 a bet.
The leader in the gambling segment of the industry is International Game Technology (IGT), the world's largest manufacturer and designer of gaming machines and software. IGT controls more than 70 percent of the U.S. slot machine market and had annual revenues of $2.53 billion in 2008. Its products include spinning reel slots like Cleopatra, Double Diamond, and Elvis; video slots like Alien and the Addams Family; and video poker. In addition, IGT develops video gaming, player tracking, and accounting systems, terminals for government-sponsored lotteries, and progressive jackpot slot-machine networks (MegaJackpots) that link slot machines from several casinos. IGT's revenues fell from $2.01 billion in 2009 to $1.95 billion in 2011, mainly due to the closing of a facility located in Alabama. Of the $1.85 billion, $1.07 accounted for gaming operations with product sales totaling $883.9 million. The company reported a net income of $283.6 million for 2011. In November 2010, the company hit the 2 million mark for total slot machines produced. In March 2012, IGT announced they were partnering with Italy's Lottomatica Group, the largest VLT operator in Italy. This unique relationship will provide IGT not only entry into the Italian VLT market but also a market worth more than $2 billion in gross gaming revenue.
Bally Technologies, Inc., which had sales of $883 million in 2008, also develops systems for linking slot machines together and, through its Bally Gaming and Systems subsidiary, makes slot and video gaming machines. Self-described as the "oldest slot manufacturing company in the world," Bally Technologies reported revenues of $778.2 million in 2010 dropping slightly to $758.2 million in 2011 with an estimated 2,500 employees worldwide. Total gaming units fell from 14,398 in 2010 to 13,597 units in 2011. However, the company extended its reach into both Australia and Italy in 2011, which was expected to increase revenues through 2012.
Regulation of coin-operated amusement devices varies from state to state. Some are very strict regarding every aspect of the industry, including use and location of the machines. For instance, in Texas, regulations determine the percentage operators may pay to the owner of the establishment in which their machine in located. Operators must also keep records of income from individual machines, while some states regulate less strictly and allow operators wider parameters.
How could the following affect your company?
Change in technology
Technology changes every day. Because we maintain our system, those changes that will make our product better will be tested and implemented as needed.
Change in government regulations
Implement changes as required. No foreseeable changes are anticipated.
How will you get the word out to customers?
Social Media (Facebook, Linked In, Twitter) have grown in popularity in the last several years. According to Automatic Merchandiser, 22% of vendors in 2011 used social media to promote sales. With new features such “check in” customers are not only able to locate products through maps, they can comment and rate products and locations in a real-time environment.
Traditional media outlets (newspaper, radio, television, magazines) will be used to locate customers who are looking to purchase or replace systems with more challenging systems. PortAvend Arcade Repair is ready to meet those challenges and more.
Because of the large space outside of our systems, we can billboard our containers with advertisements. These advertisements become rolling billboards during transport, and provide additional exposure during the event.
What image do you want to project? How do you want customers to see you?
Pickles Arcade and PortAvend Arcade Repair wants to project the image of high quality, high reliability, and easy to use systems with little maintenance.
Business Location
TBD Delta CO
Purchase Price $50,000
Improvements and Equipment $192,790
Total Cost $242,790
Currently the location is closed. Last business to occupy the location was a thrift shop.
Located in Downtown Meeker Colorado, one block from the county courthouse.
Location provides access for transport unloads and loads.
Central location makes employee access easier.
Location allows economical shipping charge as Meeker is located in the central United States.
Other Fees / Income
There are additional fees and revenue streams available, but to make this simple, we will call these streams “bonus income”, and will not be discussed further.
All systems will be fully tested using checklists and inspection sheets to maintain high levels of quality.
Maintaining separate sections for storage, assembly, testing, and delivery assure that each system is of the highest quality.
Quality control
Quality control check sheets ensure that every system is fully inspected and that all parts work with no problems observed. Any system that fails will be sent to be repaired. If any system can not pass inspection, the system will be dismantled and the parts thoroughly examined to insure that our systems works 100% correctly 100% of the time.
Customer service
Provide troubleshooting steps to help customers with the simple problems, and to quickly
identify those problems which requires a system to be shipped to us for repair.
Total employee costs first year
Hours week Rate Weekly Monthly Yearly
Manager 73 $16.00 $1,168.00 $5,061.33 $60,736.00
Full time employee 40 $12.00 $480.00 $2,080.00 $24,960.00
Part time employee 20 $10.00 $200.00 $866.67 $10,400.00
Part time employee 13 $10.00 $130.00 $563.33 $6,760.00
$1,978.00 $8,571.33 $102,856.00
Expenses/Bonus 25% $494.50 $2,142.83 $25,714.00
Total $2,472.50 $10,714.17 $128,570.00
What will be your business hours?
Monday 12:00 PM 9:00 PM
Tuesday 12:00 PM 9:00 PM
Wednesday 12:00 PM 9:00 PM
Thursday 12:00 PM 9:00 PM
Friday 9:00 AM 11:00 PM
Saturday 9:00 AM 11:00 PM
Sunday 9:00 AM 6:00 PM
Trademarks, copyrights, or patents (pending, existing, or purchased)
PortAvend Arcade Repair
Pickles Arcade
Portavend.com
Picklesarcade.com
Personnel
Number of employees: 2 - 4
Type of labor (skilled, unskilled, and professional)
Manager (Professional)
Manufacturing/Maintenance Supervisor (Skilled)
Part Time Associate (Unskilled)
Part Time Associate (Unskilled)
Total labor costs will be $520,000 annually.
Where and how will you find the right employees?
Senior staff members have already been identified, other positions will be filled via Colorado Workforce.
Quality of existing staff
Senior staff has 30 years in eletronic and mechnical experience.
Training methods and requirements
Training will consist of safety and health regulations.
Assembly and maintenance will be accomplished by on the job training, and access to our extended library of technical information.
Who does which tasks?
Maintenance /manufacturing will be responsible for repairing/restoring machines, and the repair/maintenance of showroom and all facilities on property.
Manager is overall responsible for the day to day operations.
Do you have schedules and written procedures prepared?
Currently in development.
For certain functions, (Construction/transportation) we will use contract workers in addition to employees.
Inventory
What kind of inventory will you keep: raw materials, supplies, finished goods?
Arcade Games are available for single unit deliveries. Expected to have 15-30 units on site.
All other inventory is available with 1-2 days lead time, and will not be stored on site in large quaintly.
Average value in stock (i.e., what is your inventory investment)?
Arcade Machines - $40,000.00
Total inventory on site - $40,000.00
Suppliers
BMIGaming.com, 3500 NW Boca Raton Boulevard Building 721, Boca Raton, FL 33431
Coin Operated Vending Machines / arcade machines
Cash on Delivery, Shipping via third party
In business for 25 years
Offices in the United States
Should you have more than one supplier for critical items (as a backup)?
All inventory suppliers are not unique. Inventory can be purchased from other vendors and we have identified several backup vendors for each category.
Credit Policies
Do you plan to sell on credit?
No
Management and Organization
Who will manage the business on a day-to-day basis? What experience does that person bring to the business? What special or distinctive competencies? Is there a plan for continuation of the business if this person is lost or incapacitated?
The day to day operations will be handled by the owner, Tony Valdez. Tony has over 10 years of sales experience, over 20 years as a top level manager (11 year Navy Veteran) and 20 Years as a design/Development Supervisor.
Tony’s unique combination of skills makes him ideal as a leader in such a start up industry.
A contingency plan is being developed to allow for continuation of the business in case Tony is incapacitated, and can not fulfil his duties as manager.
If you’ll have more than 10 employees, create an organizational chart showing the management hierarchy and who is responsible for key functions.
Even though this company has multiple areas of responsibility, the hierarchy for the development year is a straight line, with the manager as the top position, and All other positions reporting to him. Part time associates will report to the lead person in their area of responsibility, with the manager having overall responsibility.
Professional and Advisory Support
List the following:
Management advisory board - Will be made up of the Manager, Engineer, Lead Sales Representative and Manufacturing/Maintenance Supervisor.
Attorney - TBD
Accountant - TBD
Insurance agent - TBD
Banker - TBD
Consultant or consultants - Contact will be via key personnel of our inventory suppliers.
Start up Expenses and Capitalization
See Appendix A - Financial Spreadsheet
Appendices
Include details and studies used in your business plan; for example:
Appendix A - Financial Spreadsheet
Appendix B - Brochures and advertising materials
Appendix C - Industry studies
Appendix D - Blueprints and plans
Appendix E - Maps and photos of location
Appendix F - Detailed lists of equipment owned or to be purchased
Appendix G - Copies of leases and contracts
Appendix H - Letters of support from future customers
Appendix I - Market research studies
Appendix J - List of assets available as collateral for a loan
